The latest New Zealand employment data came in weaker than expected, raising concerns about the country's economic outlook and increasing the likelihood that the Reserve Bank of New Zealand (RBNZ) will hold off on further tightening monetary policy [1]. This disappointing result follows a period of declining industry surveys, as well as falling business and consumer confidence throughout the first quarter of the year [1].
As a result of the employment miss, downside pressure has been observed on the New Zealand dollar (NZD) against its major counterparts. In the AUD/NZD pair, technical analysis suggests support at the 1.0800 psychological level, with a sustained break below this region potentially opening the path to the next support at 1.0700. Resistance levels are noted at 1.0900 and the previous swing high near 1.0950 [1]. Traders are advised to monitor price action around these key levels, especially in response to further economic data releases from both Australia and New Zealand [1].
For NZD/JPY, the pair may continue to show weakness if risk sentiment deteriorates further or if the NZD continues to sell off following the disappointing employment data. Support is identified around the 96.00 handle, with further downside potential towards 95.00 if bearish momentum persists. On the upside, resistance is seen at 97.50 and 98.00, with the overall bias remaining bearish as long as price stays below these levels, particularly if the Bank of Japan maintains its current policy stance [1].
Market sentiment and further central bank commentary are highlighted as key drivers to watch going forward. The article emphasizes the importance of risk management, especially around high-impact event releases such as employment reports [1].
CONCLUSION
The weaker-than-expected New Zealand employment data has put pressure on the NZD, with technical setups suggesting further downside risk for both AUD/NZD and NZD/JPY. Market participants are closely watching central bank commentary and upcoming economic data for further direction.