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AUD/NZD consolidating above 1.0700 ahead of Australian jobs report

FXStreet (Córdoba) - AUD/NZD is trading around 1.0750/70 ahead of the Australian jobs report that is likely to increase volatility in the pair after several days of limited price action.

In Australia, expectations are for the unemployment rate is to stay unchanged at 6.2% and a gain of 15.000 in employment in October. Better-than-expected data is likely to boost the aussie.

AUD/NZD consolidating above the 20-day MA

Despite moving to the downside during the last five days, the decline has been limited and of less than a hundred pips since the beginning of the week. The outlook still looks promising for the aussie, that could continue to move higher after October’s slump.

Price has been able to hold above the 20-SMA that currently stands at 1.0695 and also on top of the 1.0750 area that was an important resistance in the near past. While a decline under 1.0690 is likely to weaken the aussie, a confirmation on top of 1.0850 would open the doors for more gains.

“AUD/NZD fair value looks to be 1.11-1.12 but 1.10 might be more realistic multi-week”, wrote Sean Callow, Strategist at Westpac. According to him, support for the pair should come from an RBNZ rate cut next month “that is only 40% priced in, but upside on AUD/NZD should be limited by the RBA’s easing bias and persistent sluggish momentum in China’s industrial sector, reinforcing the downtrend in iron ore prices.”

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