AUD overtakes NZD on a breakout AUDNZD

As mentioned in the European Open, Australia released its February employment change. The print was +88,700 jobs, beating expectations! Almost all the jobs were fulltime jobs. In addition, the Unemployment Rate dropped from 6.4% to 5.8%! Just as the Canadian jobs report and the US NFP report showed earlier in the month, employment data is getting better. A few hours before the Australian employment change was released, New Zealand released data of its own. Although outdated, New Zealand released its Q4 2020 GDP Growth Rate. The print was -1% MoM vs an expectation of +0.1% MoM. The result was a firmer AUD/NZD!

AUD explained: a guide to the Australian Dollar

Since August 18^th, 2020, AUD/NZD has been trading in a symmetrical triangle on a daily timeframe. In addition, since January 19^th, as price coiled to the apex of the triangle, the pair held beneath the 61.8% Fibonacci retracement level from the highs of August 18^th to the lows of December 1^st, 2020, near 1.0804. Earlier, AUD/NZD broke above the top of the downward sloping trendline from the triangle and came within 2 pips of the January 19^th highs near 1.0842!

Source: Tradingview, FOREX.com

On a 240-minute timeframe, AUD/NZD ran into resistance at the 127.2% Fibonacci extension from the March 15^th highs to lows, as well as a top, upward sloping channel trendline dating back to March 2^nd near 1.0843. If price can break through there, the next resistance area is between 1.0870 and 1.0880, which is a confluence of Fibonacci extensions: the 161.8% from the previously mentioned timeframe and the 127.2% Fibonacci extension from the February 23^rd highs to the February 26^th lows. Above there, horizontal resistance crosses just below 1.0900 at the October 20^th highs.

Source: Tradingview, FOREX.com

If price does pullback, support is at the day’s lows near 1.0789, then the bottom, upward sloping channel trendline near 1.0760 and then the March 15^th lows of 1.0742.

In a few hours, Australia will release Preliminary retail sales data for February. Expectations are +0.4% vs +0.5% in January. If the number is better than expected, AUD/NZD may continue to move higher!

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