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  • AUD/NZD has dropped from 1.0761 on a very impressive jobs data outcome and has taken out S3 and the 21st Oct 1.0767 low and lowest levels since June, now a touch below the 61.8% fibo at 1.0755.  
  • AUD/NZD eyes a run to the 76.4% fibo at 1.0656.

AUD/NZD has been in decline since the double top of 8th/9th August highs and is now breaking into renewed bearish territory having just pierced the 61.8% Fibo on the New Zealand jobs data as follows: (NZ: Unemployment rate drops to 3.9% in Q3 vs 4.5% expected)

  • Unemployment rate: 3.9% “¦.(The main driver of the upside) vs the expected 4.4%, prior was 4.4%, revised from 4.5%.
  • Employment change q/q: 1.1% “¦ (Another very positive outcome) vs expected 0.5%, prior was 0.5%.
  • Employment change y/y: 2.8% betaing the expected 2.0%, prior was 3.7%.
  • Participation rate: 71.1% rising even as unemployment falls, another strong sign in this report.
  • expected 70.9%, prior was 70.9%.
  • Average hourly earnings: 1.4% (Good data) vs the expected 0.8%, prior was 0.2%.
  • Private wages including overtime: 0.5% vs the expected 0.5%, prior was 0.6%.
  • Private wages excluding overtime: 0.5% vs the expected 0.5%, prior was 0.6%.
  • Traders will now look to the RBNZ survey of inflation expectations (1pm Syd/10am Sing/HK) which was 2.04%yr in Q3. Then we have the RBNZ later this week which is already of the view that it had met half of its mandate of ‘maximum sustainable employment”, so it will make this meeting even more interesting following this data.

AUD/NZD levels

A break of the 76.4% fibo at 1.0656 opens the way down to a full retracement of the 11th April lows down at 1.0489. 1.0380 would be the next major to the downside thereafter. On a pullback, the 21-D SMA is located at 1.0856.