- AUD/NZD sellers renew 2021 low during second day of losses on strong NZ employment data.
- NZ Unemployment Rate dropped to 4.0%, Employment Change rose 1.0% in Q2.
- Mixed market sentiment tests traders, data from Australia, China eyed for fresh impulse.
AUD/NZD remains on the back foot, taking offers around 1.0500 amid Wednesday’s initial Asian session. Although the Reserve Bank of Australia’s (RBA) hawkish tilt tried to save the bears the previous day, New Zealand’s (NZ) strong employment figures for the second quarter (Q2) weighed on the quote of late.
NZ Employment Change crossed 0.7% market consensus and 0.6% prior to 1.0% whereas the Unemployment Rate dropped to 4.0% versus 4.5% forecast and 4.7% previous readouts.
Read: NZ jobs data beats expectatons, NZD/USD marginally higher
Other than New Zealand data that amplifies concerns over the Reserve Bank of New Zealand’s (RBNZ) rate hike in 2021, Auckland’s victory to control the pandemic despite resurgence around the globe also exerts downside pressure on the quote. Furthermore, the RBNZ’s moves to curb property prices and hawkish outlook weigh on the AUD/NZD prices as well.
Meanwhile, the market’s indecision over US stimulus and recent geopolitical jitters concerning Iran and China challenge the pair’s moves. On the same line is the cautious mood ahead of the key US data/events as well as mixed covid updates from Australia, the UK and the US.
Amid these plays, Wall Street marked notable gains but the S&P 500 Futures drop 0.10% by the press time.
Looking forward, AUD/NZD bears may wait for Australia’s June Retail Sales and China’s Caixin Services PMI for July for fresh impulse. Should these data join the recently downbeat risk appetite, AUD/NZD may pause the downtrend for now. Additionally, ADP Employment Change for July, an early signal for Friday’s US Nonfarm Payrolls (NFP), as well as ISM Services PMI will be the key to follow.
Technical analysis
A three-week-old descending trend line around 1.0495 challenges AUD/NZD bears targeting the December 2020 low of 1.0412. On the contrary, recovery moves are capped by weekly resistance line and 21-DMA, respectively around 1.0580 and 1.0600.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.