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

It is a busy morning for the AUD/USD and NZD/USD. This morning, Australian home loans and the RBA Monetary Policy Statement will draw interest ahead of China’s Caixin Services PMI.

While we expect the RBA Monetary Policy Statement to influence the AUD/USD, China’s Services PMI will impact both pairings. The manufacturing sector unexpectedly contracted in April. A sharp decline in service sector activity would pressure the AUD/USD and the NZD/USD.

However, the RBA Monetary Policy Statement could cushion any downside for the AUD/USD. On Tuesday, the RBA surprised the markets with a 25-basis point interest rate hike. The RBA Statement revealed that further interest rate hikes are on the horizon should inflation remain elevated.

Looking ahead to the US session, the US Jobs Report will be the main report of the day. A pickup in wage growth and a jump in non-farm payrolls would put a 25-basis point June rate hike on the table for the Fed.

AUD/USD Price Action

This morning, the AUD/USD was up 0.13% to $0.67011. A bullish start to the day saw the AUD/USD rise from an early low of $0.66915 to a high of $0.67024.

Technical Indicators

Resistance & Support Levels

The AUD/USD needs to avoid the $0.6680 pivot to target the First Major Resistance Level (R1) at $0.6719. A move through the Thursday high of $0.67063 would signal a bullish session. However, the Aussie would need the numbers from China and the RBA to support a pre-US session breakout.

In case of a breakout session, the Aussie would likely test the Second Major Resistance Level (R2) at $0.6746. The Third Major Resistance Level (R3) sits at $0.6812.

A fall through the pivot would bring the First Major Support Level (S1) at $0.6653 into play. However, barring a US Jobs Report-fueled sell-off, the AUD/USD pair should avoid sub-$0.6650 and the Second Major Support Level (S2) at $0.6614.

The Third Major Support Level (S3) sits at $0.6548.

Looking at the EMAs and the 4-hourly chart, the EMAs sent bullish signals. The AUD/USD sits above the 200-day EMA, currently at $0.66888. 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 hold above the 200-day EMA ($0.66888) would support a breakout from R1 ($0.6719) to target R2 ($0.6746). However, a fall through the 200-day EMA ($0.66888) would bring the 100-day ($0.66702) and 50-day ($0.66627) EMAs and S1 ($0.6653) into view. A fall through the 50-day EMA would be a bearish signal.

NZD/USD Price Action

This morning, the NZD/USD was up 0.14% to $0.62888. A bullish start to the day saw the NZD/USD rise from an early low of $0.62770 to a high of $0.62894.

Technical Indicators

Resistance & Support Levels

The NZD/USD has to avoid the $0.6262 pivot to target the First Major Resistance Level (R1) at $0.6317. A move through the Thursday high of $0.62985 would signal a bullish session. However, the China services PMI must support a pre-US session breakout.

In the case of a breakout session, the Kiwi would likely test the Second Major Resistance Level (R2) at $0.6353. The Third Major Resistance Level (R3) sits at $0.6445.

A fall through the pivot would bring the First Major Support Level (S1) at $0.6225 into play. However, barring a US Jobs Report-fueled sell-off, the NZD/USD should steer clear of sub-$0.62 and the Second Major Support Level (S2) at $0.6170.

The Third Major Support Level (S3) sits at $0.6079.

Looking at the EMAs and the 4-hourly chart, the EMAs sent bullish signals. The NZD/USD sits above the 200-day EMA, currently at $0.62094. The 50-day EMA closed in on the 200-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.

A hold above S1 ($0.6225) and the 200-day EMA ($0.62094) would support a breakout from R1 ($0.6317) to target R2 ($0.6353). However, a fall through S1 ($0.6225) and the 200-day ($0.62094) would bring the 50-day ($0.62031) and 100-day ($0.61987) EMAs into play. A fall through the 50-day EMA would send a bearish signal.