The AUD/NZD pair printed a fresh four-day high at 1.0970 in the early Asian session. The cross strengthens after the release of downbeat New Zealand Employment (Q4) data.  The Employment Change dropped to 0.2% from the expectations of 0.3% and the former release of 1.3%. While the Unemployment Rate has increased to 3.4% from the consensus and the prior release of 3.3%.

Signs of losing threads in the tight labor market of New Zealand indicate that inflation projections will trim further as retail demand may get dents. Meanwhile, the Labor cost index has remained mixed, which will still be a concern for the Reserve Bank of New Zealand (RBNZ). The quarterly Labor cost index has landed at 1.1% lower than the estimates of 1.3% but similar to the prior release of 1.1%. On an annual basis, the economic data has remained in line with the expectations of 4.3% and higher than the 3.8% the prior release.AUD/NZD has been on the backside of the dominant bear trend that has been in play since the end of September but is on the backside of the correction of the trend as well. Nevertheless, there are prospects of a move higher according to the following daily chart.

The upside is favourable with the tepid correction into the 50% mean reversion area but there is room to go should the bears fancy a crack at the 61.8% ratio or even lower to the prior resistance of the W-formation located near the 78.6% ratio.

AUDNZD liquidating market orders

Feb 01 2023