AUD/USD and NZD/USD Fundamental Analysis: US Jobs Report

Highlights

• The AUD/USD and the NZD/USD were flat this morning.
• This morning, there are no economic indicators from Australia or New Zealand to influence, leaving hawkish Fed bets to test investor appetite.
• However, the US Jobs Report will move the dial this afternoon.

It is a quiet start to the day for the AUD/USD and NZD/USD. There are no economic indicators from Australia or New Zealand to draw interest this morning. The lack of economic indicators will likely leave investors to consider the overnight numbers from the US and Fed rate hike bets.

Away from the economic calendar, China-US trade-related news will also need consideration, along with updates on Janet Yellen’s visit to Beijing.

The European Session

German industrial production numbers for May will draw interest early in the European session. A marked decline in production would fuel recessionary fears and test the appetite for riskier assets and commodity currencies.

The US Session

It is a big day ahead on the US economic calendar. The US Jobs Report will be in focus. A surge in nonfarm payrolls and a pickup in wage growth would fuel bets of a second consecutive rate hike in September.

Economists forecast nonfarm payrolls to increase by 225k and wages to rise by 4.2% year-over-year in June.

AUD/USD Price Action

Daily Chart

The Daily Chart showed an AUD/USD fall below the psychological $0.6650 support level and the 50-day EMA ($0.66842), signaling a near-term bearish trend. However, the AUD/USD also remained below the 200-day ($0.67478), signaling bearish momentum over the longer term.

Notably, the 50-day EMA fell back from the 200-day EMA and reflected bearish momentum following the Thursday loss.

Looking at the 14-Daily RSI, the 42.90 reading signals a bearish trend and aligns with the 50-day EMA. The bearish indicators support a fall through the upper level of the $0.6615 – $0.6600 support band.

4-Hourly Chart

Looking at the 4-Hourly Chart, the AUD/USD faces strong resistance at the $0.6650 psychological level. After the Thursday loss, the AUD/USD sits below the 200-day ($0.66858) and 50-day ($0.66671) EMAs, a bearish signal. Significantly, the 50-day EMA fell back from the 200-day EMA, signaling another run at the current support band of $0.6615 – $0.6600.

The AUD/USD must break through the 50-day and 200-day EMAs to retarget the lower level of the resistance band of $0.6750 – $0.6770.

Looking at the RSI indicator, the 14-4H RSI reading of 38.72 indicates a bearish stance, with selling pressure outweighing buying pressure. The RSI is aligned with EMAs and supports a fall through the upper level of the $0.6615 – $0.6600 support band.

NZD/USD Price Action

Daily Chart

The Daily Chart showed an NZD/USD fall through the $0.6200 psychological level ahead of the busy Friday session. Significantly, the EMAs send bearish signals. The Kiwi dollar sat below the 50-day ($0.61646) and 200-day ($0.62207) EMAs.

Notably, the 50-day EMA eased back from the 200-day EMA, reflecting bearish momentum over the near and longer term.

Looking at the 14-Daily RSI, the 50.43 reading signals a moderately bullish trend, supporting a run at the 50-day EMA ($0.61646) to target the 200-day EMA ($062207) and the lower level ($0.6234) of the $0.6234 – $0.6250 resistance band.

4-Hourly Chart

Looking at the 4-Hourly Chart, the NZD/USD faces strong resistance at the $0.6175 psychological level. After the bearish Thursday session, the NZD/USD sits below the 200-day ($0.61561) and the 50-day ($0.61569) EMAs, supporting a run at $0.61.

The 50-day EMA converged on the 200-day EMA, with a bearish cross of the 50-day EMA through the 200-day EMA, a signal for another sell-off.

The 14-4H RSI reading of 47.17 indicates a bearish stance, with selling pressure outweighing buying pressure. Significantly, the 14-4H RSI aligns with the EMAs and signals a run at the $0.61 psychological support level and the current support band of $0.6035 – $0.6015.