The AUDNZD forex pair could have moved from the latest New Zealand GDP and Australian employment figures.
AUDNZD – Weekly Chart
After a recent rally, AUDNZD is trading at 1.1018 and could set a potential “W formation” with a break above 1.1087. That would create a target at the 1.1495 level.
A Reuters poll said the RBNZ’s aggressive interest rate hikes likely pushed the country into a technical recession during the first quarter. Gross domestic product (GDP) is expected to drop 0.1% in the March quarter, below the Reserve Bank of New Zealand’s 0.3% prediction. This would mean the country was in a technical recession after the 0.6% contraction in the fourth quarter.
The central bank hinted last month that it was finished with its tightening after raising rates another 25 basis points to the highest level in more than 14 years at 5.5%. However, some economists believe an economic boost from high migration levels and the return of tourism might lead to more.
The New Zealand growth figures will be followed by Australian employment, where analysts expect to see 15k jobs added, up from last month’s -4.3k print. Unemployment is likely to stay at the same 3.7% level.
Australian business and consumer surveys warned of a slowdown in business activity and weak consumer confidence. A study from the National Australia Bank showed its index of business conditions fell by seven points to +8 in May.
“There is a growing risk that the RBA’s attempts to maintain an even keel ‘run aground,'” said NAB Chief Economist Alan Oster. “The trend over coming months will be important as the RBA tries to assess whether it has done enough and if underlying inflation pressures are easing in a timely way.”