AUD/USD and NZD/USD Fundamental Analysis: Aussie Employment in Focus

It is a busy day for the AUD/USD and NZD/USD. Wholesale inflation figures from New Zealand will draw interest shortly. Hotter-than-expected numbers would deliver RBNZ monetary policy uncertainty following the 50-basis point interest rate hike.

However, the New Zealand government will also be in the spotlight. The New Zealand government will release the Annual Budget today.

For the Aussie Dollar, employment figures for April will also influence sentiment toward the RBA’s monetary policy outlook. Wage growth accelerated in Q1, leaving the RBA under pressure to maintain a hawkish policy stance. Another increase in employment would fuel bets on further interest rate hikes.

Economists forecast employment to increase by 25.0k following a 53.0k rise in March and for the unemployment rate to hold steady at 3.5%.

Later today, US debt ceiling-related news, US economic indicators, and Fed commentary will need consideration. The Philly Fed Manufacturing Index and jobless claims figures will draw interest.

AUD/USD Price Action

This morning, the AUD/USD was up 0.04% to $0.66614. A mixed start to the day saw the AUD/USD fall to an early low of $0.66574 before rising to a high of $0.66647.

Technical Indicators

Resistance & Support Levels

The AUD/USD needs to avoid the $0.6654 pivot to target the First Major Resistance Level (R1) at $0.6678 A move through the Wednesday high of $0.66731 would signal a bullish session. However, the Aussie would need employment numbers and debt ceiling news to support a breakout.

In case of a breakout session, the Aussie would likely test the Second Major Resistance Level (R2) at $0.6698 and resistance at $0.67. The Third Major Resistance Level (R3) sits at $0.6742.

A fall through the pivot would bring the First Major Support Level (S1) at $0.6634 into play. However, barring a risk-off-fueled sell-off, the AUD/USD pair should avoid sub $0.66. The Second Major Support Level (S2) at $0.6609 should limit the downside.

The Third Major Support Level (S3) sits at $0.6565.

Looking at the EMAs and the 4-hourly chart, the EMAs sent bearish signals. The AUD/USD sits below the 50-day EMA, currently at $0.66914. The 50-day EMA pulled back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish signals.

An AUD/USD move through R1 ($0.6678) would support a breakout from the EMAs to target R2 ($0.6698) and $0.67. However, failure to move through the 50-day EMA ($0.66914) would leave S1 ($0.6634) in view. An AUD/USD move through the 50-day EMA would send a bullish signal.

NZD/USD Price Action

This morning, the NZD/USD was down 0.01% to $0.62472. A mixed start to the day saw the NZD/USD rise to an early high of $0.62507 before falling to a low of $0.62421.

Technical Indicators

Resistance & Support Levels

The NZD/USD has to move through the $0.6249 pivot to target the First Major Resistance Level (R1) at $0.6273 and the Wednesday high of $0.62732. A return to $0.6250 would signal a bullish session. However, US debt ceiling news and the annual budget must support a session breakout.

In the case of a breakout session, the Kiwi would likely test the Second Major Resistance Level (R2) at $0.6297 and resistance at $0.63. The Third Major Resistance Level (R3) sits at $0.6346.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.6224 in play. However, barring a risk-off-fueled sell-off, the NZD/USD should steer clear of sub-$0.62. The Second Major Support Level (S2) at $0.6200 should limit the downside.

The Third Major Support Level (S3) sits at $0.6151.

Looking at the EMAs and the 4-hourly chart, the EMAs sent bearish signals. The NZD/USD sits below the 100-day EMA, currently at $0.62499. The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bearish signals.

A move through the 100-day EMA ($0.62499) would support a breakout from the 50-day EMA ($0.62589) and R1 ($0.6273) to target R2 ($0.6297). However, a fall through the 200-day EMA ($0.62396) would bring S1 ($0.6224) into play. A move through the 50-day EMA would send a bullish signal.