Preview of Antipodean data double header: AUD/USD and NZD/USD
Tony Sycamore December 16, 2020 9:30 AM
An economic data doubleheader in the Antipodeans tomorrow in the form of Australian employment data for November and Q3 GDP data in New Zealand.
While traders could be excused for having other things on their minds at this time of the year, tomorrow's data will provide the last meaningful update on the Antipodean economies until mid-January.
Australian Employment November:
Despite the continued deterioration in the Australia - China relationship, likely to cast a shadow into 2021 and possibly beyond given Chinas reputation for playing the long game, things are looking quite rosy here in Australia at present.
COVID-19 has been contained, commodity prices remain supportive, consumer confidence is back to 10-year highs and the labour market is expected to confirm a continued improvement.
Following a 179k gain in October, employment is expected to rise by 50k driven by the continuing reopening in Victoria. However, a higher participation rate will keep the unemployment rate stuck at around 7%, representing spare capacity, a key point of concern for the RBA.
Heading into tomorrow's job data, the rally in the AUD/USD has stalled just ahead of .7600c. However, price has broken higher and the expectation remains for a rally towards .7800c. Pullbacks are likely to be well supported back towards .7470/50 and again at .7420/00.
New Zealand Q3 GDP:
The New Zealand economy is also in a healthy position to close out the year. Containment of the virus and a rapid fiscal response has provided the backbone for the economy's rebound. This is expected to translate into a thumping 13.5% rise q/q, reclaiming all and more of the previous quarter's 12.2% fall.
Challenges lay ahead for the New Zealand economy in 2021. However, with talk of an imminent re-opening of borders in the form of a travel bubble with Australia, it would allow the New Zealand economy to continue to grow in Q4.
Heading into tomorrow’s data, the NZD/USD’s break above .7000c is viewed as a bullish medium-term development, opening the way for the rally to extend towards .7500c. In the short term, the NZD/USD has paused for breath with pullbacks likely to find support near .7000c and again at .6950.
Source Tradingview. The figures stated areas of the 16th of December 2020. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation
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