AUD/NZD was headed for parity just a couple of weeks ago but the pair somehow managed to find a floor and it’s been one-way traffic ever since. There was a downtrend in place since November, which was also broken at the end of April as the iron ore price rally underpinned the AUD.
This month’s RBA statement saw the AUD extend its gains and the pair rallied through $1.0500. We had a set of disappointing jobs numbers out of New Zealand today, which weighed heavily on the NZD.
The unemployment rate rose to 5.8% and this was much worse than an expected 5.5%. The employment change also came in short at 3.2% and represented a significant drop-off. This saw AUD/NZD hit a high of $1.0646 as momentum remained strong.
However, the pair has also popped into overbought territory at around 72 and this might discourage some traders from pushing it higher from here. There is still plenty of event risk on the way with Australian jobs numbers likely to be a highlight. I would prefer buying the pair on dips as opposed to chasing the price higher.