AUD/NZD slides below 1.0800 confluence support after weaker Australian jobs data

• AUD/NZD drifts lower for the third straight day and drops to a one-week low on Thursday.
• The disappointing Australian jobs data weighs on the AUD and exerts pressure on the cross.
• The RBNZ's hawkish outlook on Wednesday contributes to the NZD's relative outperformance.

The AUD/NZD cross remains under some selling pressure for the third successive day and retreats further from a two-and-half-week high, around the 1.0875-1.0880 region touched on Tuesday. The downfall picks up pace during the Asian session on Thursday and drags spot prices to a one-week low, around the 1.0780 area in the last hour.

The Australian Dollar (AUD) weakens across the board in reaction to the disappointing release of the domestic employment data and turns out to be a key factor exerting pressure on the AUD/NZD cross. In fact, the Australian Bureau of Statistics (ABS) reported that the economy lost a net 14,600 jobs in July and the Unemployment Rate unexpectedly rose to 3.7% during the reported month. This should allow the Reserve Bank of Australia (RBA) to leave interest rates unchanged for the third successive month at its meeting in September.

The New Zealand Dollar (NZD), on the other hand, continues with its relative outperformance against its Australian counterpart in the wake of the Reserve Bank of New Zealand's (RBNZ) hawkish outlook. This is seen as another factor that contributes to the offered tone surrounding the AUD/NZD cross. It is worth recalling that the RBNZ indicated on Wednesday that interest rates will remain at a restrictive level for some time and now forecasts the key Official Cash Rate (OCR) to remain at 5.5% through December 2024.

The downward trajectory, meanwhile, takes along some short-term trading stops placed near the 1.0800 confluence support, comprising the 100-day and the 200-day Simple Moving Averages (SMAs). This, in turn, prompts some technical selling around the AUD/NZD cross and supports prospects for a further near-term depreciating move. That said, any subsequent slide is more likely to find decent support near the 1.0755-1.0750 horizontal zone, which if broken will be seen as a fresh trigger for bears and validate the negative outlook.

Technical levels to watch