Preview of AU jobs data and what it means for AUD/NZD
Tony Sycamore March 17, 2021 11:30 AM
One of the guiding principles of Foreign Exchange trading is to buy the currencies of countries that are showing positive growth prospects and to short the currencies of countries where growth is slowing/falling.
In yesterday’s note, we previewed the release of tomorrows New Zealand Q4 GDP data that is expected to show that the New Zealand economy has stalled due to the impact of international border closures on tourism.
The Australian economy is less reliant on tourism and following the Australian Government’s announcement earlier this week of a $1.2 billion package to support the tourism industry, is expected to remain less so.
Earlier this month, Australian Q4 GDP exceeded expectations, prompting economists to raise 2021 Australian GDP forecasts to ~4.5%, accentuating the widening growth prospects between the two Antipodean economies.
The release tomorrow at 11.30 am AEDT of Australian Labour Force data is expected to further reinforce the positive growth prospects of the Australian economy, via the addition of 30k new jobs and as the unemployment rate edges lower to 6.3%, from 6.4%.
Providing tomorrow mornings FOMC doesn’t deliver any untoward surprises and that New Zealand GDP and Australian employment data drops as outlined above, there may be an opportunity for traders in the AUD/NZD cross rate.
Technically a break and close above triangle resistance and the recent double high at 1.0825/30 would provide an initial indication that the correction from the August 2020, 1.1043 high is complete and that the uptrend had resumed.
To take advantage of this and only after the release of both NZ GDP and Australian employment data, I will look to enter AUD/NZD longs at 1.0836 using a stop entry, leaving room to add to the position if the daily close is above 1.0825.
The stop loss would be placed initially at 1.0735 and the target is a retest and break of the 1.1043 high.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.