AUD/USD and NZD/USD Fundamental Analysis: Aussie Employment Eyed

It is a busy morning ahead for the AUD/USD, with employment numbers for March in focus. After the RBA decision to hit the pause button and the overnight FOMC meeting minutes, we expect the Aussie dollar to be responsive to the numbers.

Economists forecast employment to increase by 20.0k and the unemployment rate to rise from 3.5% to 3.6%. A more marked rise in employment and a steady unemployment rate would support further monetary policy tightening.

Last week, RBA Governor Philip Lowe warned that the decision to hold rates unchanged did not signal an end to the policy tightening cycle. Today’s stats will likely form part of the considerations for the next policy decision.

While the employment numbers will provide direction, trade data from China will impact the AUD/USD and the NZD/USD. Economic indicators from China have yet to impress. Economists forecast exports to fall 7.0% year-over-year and for the dollar trade surplus to narrow from $116.88 billion to $39.20 billion.

After a busy morning session, US economic indicators will also move the dial. Wholesale inflation and jobless claims figures will give the markets further clues on what to expect from the Fed in May.

While the stats will move the dial, FOMC member expectations of a bank crisis-fueled recession could test market risk sentiment.

AUD/USD Price Action

The Aussie was up 0.06% to $0.66931. A mixed start to the day saw the AUD/USD fall to an early low of $0.66855 before rising to a high of $0.066957.

Technical Indicators

The AUD/USD needs to avoid the $0.6687 pivot to target the First Major Resistance Level (R1) at $0.6726. A move through the Wednesday high of $0.67235 would signal a bullish session. However, the Aussie Dollar would need the employment numbers to support a breakout day.

In the case of another breakout session, the Aussie would likely test the Second Major Resistance Level (R2) at $0.6762. The Third Major Resistance Level (R3) sits at $0.6838.

A fall through the pivot would bring the First Major Support Level (S1) at $0.6650 into play. However, barring a risk-off-fueled sell-off, the AUD/USD pair should avoid the Second Major Support Level (S2) at $0.6611.

The Third Major Support Level (S3) sits at $0.6535.

Looking at the EMAs and the 4-hourly chart, the EMAs send bullish signals. The AUD/USD sits above the 100-day EMA, currently at $0.66882. The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.

A move through the 200-day EMA ($0.67142) and R1 ($0.6726) would give the bulls a run at R2 ($0.6762). However, a fall through the 100-day ($0.66882) and 50-day ($0.66814) EMAs would bring S1 ($0.6650) into view. A fall through the 50-day EMA would send a bearish signal.

NZD/USD Price Action

This morning, the Kiwi was up 0.06% to $0.62120. A mixed start to the day saw the NZD/USD fall to an early low of $0.62062 before rising to a high of $0.62170.

Technical Indicators

The NZD/USD needs to avoid the $0.6211 pivot to target the First Major Resistance Level (R1) at $0.6240 and the Wednesday high of $0.62420. A return to $0.6240 would signal a bullish session. However, the China trade data would need to support a breakout.

In the case of another breakout session, the Kiwi would likely test resistance at $0.6250 but fall short of the Second Major Resistance Level (R2) at $0.6271. The Third Major Resistance Level (R3) sits at $0.6331.

A fall through the pivot would bring the First Major Support Level (S1) at $0.6180 into play. However, barring a risk-off-fueled sell-off, the NZD/USD pair would likely avoid sub-$0.6150. The Second Major Support Level (S2) at $0.6151 should limit the downside.

The Third Major Support Level (S3) sits at $0.6091.

Looking at the EMAs and the 4-hourly chart, the EMAs send bearish signals. The NZD/USD sits below the 50-day EMA, currently at $0.62359. 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.

A move through the 50-day ($0.62359) and 100-day ($0.62376) EMAs would support a breakout from R1 ($0.6240) and the 200-day EMA ($0.62416) to bring $0.6250 into view. However, failure to move through the 50-day EMA ($0.62359) would leave S1 ($0.6180) in play. A move through the 50-day EMA ($0.62359) would send a bullish signal.