AUDUSD and NZDUSD vulnerable to further losses

Intermediate
  • As we highlighted in yesterdays’ report here the present “risk on” stage seen in the equity markets has also seen a strong US Dollar, with the US currency rallying across global major currencies (except the Japanese Yen).
  • This reflects strong US economic data, despite the continuing worries about a faltering global recovery.
  • We underlined this US$ strength in the last report by focusing on negative pressures for EURUSD.
  • But here we spotlight the weakness in AUDUSD and NZDUSD Forex rates, with the US currency strength reinforced by both the Reserve Bank of Australia (RBA) and Reserve Bank of New Zealand (RBNZ) shifting more dovish as their respective economies report worsening economic data, putting downside pressures on their respective currencies.

AUDUSD intermediate-term bear trend intact

A further push lower Thursday through key .6999 support and alos.6991, to reinforce Wednesday’s aggressive plunge, through multiple supports from .7104/00 to .7122 (after Australian CPI data), to keep risks lower for Friday.

The early February push .7073 set an intermediate-term bear trend.

For Today:                                                        

  • We see a downside bias for .6986; break here aims for .6949, maybe even .6916.
  • But above .7050 sees little resistance up towards .7103.

Intermediate-term Outlook – Downside Risks: We see a downside risk for .6916.

  • Lower targets would be .6829 and .6738
  • What Changes This? Above .7207 shifts the intermediate-term outlook straight to a bull theme.

4 Hour AUDUSD Chart

AUDUSD Chart

NZDUSD bear trend intact (despite a bounce)

A probe Thursday below a key, multi-month low at .6583, and despite a rebound after from .6578, whilst capped minimally below .6659 we still see negative forces from the recent selloff through supports and the prior April surrender of the key .6716 level, leaving the bias lower Friday.

The April push below .6716 set an intermediate-term bear theme.

For Today:

  • We see a downside bias for .6603 and .6578; break here aims for .6542.
  • But above .6659 opens risk up to .6679/82

Intermediate-term Outlook – Downside Risks: We see a downside risk for .6583.

  • Lower targets would be .6347 and .6195
  • What Changes This? Above .6837 shifts the outlook back to neutral; above .6938 is needed for a bull theme.

4 Hour NZDUSD Chart

NZDUSD Chart

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