AUD/NZD Pulls Back as Kiwi Strengthens on Strong Labour Data

Market Overview

On Wednesday, the Australian Dollar faced renewed pressure against its New Zealand counterpart after stronger-than-expected labour market data from New Zealand lifted the Kiwi across the board. Investors reacted positively to the jobs report, which confirmed resilience in the NZ economy despite global headwinds. Meanwhile, optimism over China’s easing policy—particularly the reserve requirement ratio cut—supported commodity-linked currencies in general, though the Aussie lagged amid local headwinds and repositioning after a two-week rally.

Technical Analysis

On the 4-hour chart, AUD/NZD has entered a corrective phase after failing to sustain its previous uptrend. Price action has slipped below the ascending trendline support, suggesting a temporary loss of bullish momentum. The pair is currently consolidating between resistance at 1.08322 and key support at 1.07803, with the near-term bias skewed to the downside.

Should sellers break decisively beneath 1.07803, downside targets are layered at 1.07662, 1.07588, 1.07482, and potentially 1.07284. Momentum indicators confirm growing selling pressure, with RSI pulling back from overbought territory and MACD turning lower with widening negative histogram bars.

However, if buyers regain control and push the price above the 1.08322 high, it would invalidate the current bearish setup and reopen the path to further gains.

Key Technical Levels

Resistances: 1.08001, 1.08322

Supports: 1.07803, 1.07662, 1.07588, 1.07482, 1.07284

Fundamental Drivers

The bullish Kiwi momentum was driven by New Zealand’s upbeat jobs report, which showed improving employment and potentially dampens expectations of further near-term monetary easing by the Reserve Bank of New Zealand. Meanwhile, investor attention remains fixed on the outcome of the first round of US-China trade talks, with the outcome likely to introduce volatility across risk-sensitive pairs like AUD/NZD. Additionally, China’s recent RRR cut signals further economic support, improving the outlook for regional trade.

Conclusion

Break below 1.07803 exposes 1.07482 and 1.07284; upside recovery requires a clear move above 1.08322.

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