Australian Dollar cools off against the New Zealand Dollar before jobs data

Tuesday's peak just under 1.2500 was the highest for AUD/NZD since early 2013. The cross is trading just above 1.2400, on track for a second straight down day.

The climb has come from the gap between the two countries' interest rates. The Reserve Bank of Australia (RBA) has its cash rate at 4.35% and is widely expected to raise it to 4.60% on September 29. The Reserve Bank of New Zealand (RBNZ) is at 2.75%, and its own forecast points to no change on October 28. The RBNZ raised its rate on September 2 and the Kiwi still fell against the Aussie that day, because the forecast published with the hike pointed to that pause.

A good Australian jobs number has little left to add

Australia's employment report comes out at 01:30 GMT on Thursday, with a 20K gain in jobs and a steady 4.5% jobless rate forecast. A result like that keeps the RBA on course for September 29, and a soft one raises doubts about the hike. New Zealand has no data of its own before the weekend.

A strong report would mostly confirm a gap that is already wide. In early 2013, the two cash rates were half a point apart, and an RBA hike would take the gap to 1.85 percentage points.

Levels and bias

Resistance: 1.2450 capped Wednesday's bounce. Above it, Tuesday's high just under 1.2500 is the cap, and 1.2500 itself hasn't traded since early 2013.

Support: The 1.2400 area has held Wednesday's dip so far, with Tuesday's low just under it. Below that, 1.2350, then 1.2300, the old ceiling that capped the cross in early September before it broke higher on September 8.

Bias: A cautious short below 1.2450, looking for a pullback to 1.2350 and then 1.2300 rather than a turn in the trend. The daily Stochastic Relative Strength Index (Stoch RSI) turned down from the top of its range and reads near 89. A daily close above 1.2500 calls off the short.

AUD/NZD daily chart