Australian Dollar weakened broadly after today’s significantly softer labor-market report, though it continues to show relative resilience against the U.S. Dollar and most majors—with the notable exception of Kiwi. The sharp downside surprise in employment has tilted sentiment in favor of further downside in AUD/NZD as markets reassess the likelihood of near-term RBA tightening.
Speculation of a 2026 RBA rate hike had intensified in recently, particularly after Governor Michele Bullock signaled that cuts were not on the horizon and that the Board had actively discussed scenarios in which rates might need to rise.
However, today’s -21.3k contraction in employment has sharply undercut that momentum. The data suggest that any discussion of a rate hike in the near term is premature. A long pause now appears the more plausible baseline—at least through Q1—while the RBA waits for a fuller run of data to determine whether underlying developments justify movement in either direction.
Technically, AUD/NZD is extending the corrective pattern from 1.1634. Today’s dip suggests the recovery from, as the second leg of the correction form 1.1634, might have completed at 1.1514 already. Deeper fall would be seen to 1.1396 first.
Break there will extend the fall to 61.8% projection of 1.1634 to 1.1396 from 1.1514 at 1.1367, and possibly further to 100% projection at 1.1267. But even in this case, downside should be contained by 1.1275 cluster support, which is slightly below 38.2% retracement of 1.0649 to 1.1634 at 1.1258.
The up trend from 1.0649 is expected to resume through 1.1634 at a later stage. But that will require renewed conviction that the RBA is genuinely preparing for a rate hike in 2026.
