AUD/USD and NZD/USD Fundamental Analysis: Aussie CPI and China PMIs in Focus

It is a busy Wednesday session for the AUD/USD and the NZD/USD. NZ Business confidence numbers for May will draw interest ahead of Australian inflation figures for April.

While the business confidence numbers will influence the Kiwi, Australian inflation figures will likely have more impact on the Aussie, with the RBA eager to see signs of cooling inflationary pressure.

A pickup in Australian inflation would keep pressure on the RBA, while business confidence numbers are unlikely to influence the RBNZ.

However, while the stats will draw interest, private sector PMI numbers from China will also move the dial. NBS Manufacturing and Non-Manufacturing PMI figures for May will give investors a better view of the macroeconomic environment midway through the second quarter.

Economists forecast the NBS Manufacturing PMI to rise from 49.2 to 49.4 and the Non-Manufacturing PMI to fall from 56.4 to 55.0. A deeper contraction in the manufacturing sector would spook investors and weigh on riskier assets.

Looking ahead to the US session, JOLTs job openings will be the main report as investors prepare for Friday’s US Jobs Report. While the headline figure will influence, investors should consider quit rates. A pickup in quit rates would signal employee confidence in US labor market conditions.

However, FOMC members and US debt ceiling-related news will also need consideration. FOMC members Harker and Bowman are on the calendar to speak today.

AUD/USD Price Action

This morning, the AUD/USD was flat at $0.65169. A mixed start to the day saw the AUD/USD rise to an early high of $0.65181 before falling to a low of $0.65126.

Technical Indicators

Resistance & Support Levels

The AUD/USD needs to move through the $0.6526 pivot to target the First Major Resistance Level (R1) at $0.6550 and the Tuesday high of $0.65593. A move through the morning high of $0.65181 would signal a bullish session. However, economic indicators and the debt ceiling news must support a breakout.

In case of a breakout session, the Aussie would likely test the Second Major Resistance Level (R2) at $0.6583. The Third Major Resistance Level (R3) sits at $0.6639.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.6493 in play. However, barring a risk-off-fueled sell-off, the AUD/USD pair should avoid sub $0.6450. The Second Major Support Level (S2) at $0.6470 should limit the downside.

The Third Major Support Level (S3) sits at $0.6413.

Looking at the EMAs and the 4-hourly chart, the EMAs sent bearish signals. The AUD/USD sits below the 50-day EMA, currently at $0.65679. The 50-day EMA fell back from the 100-day EMA, with the 100-day EMA pulling back from the 200-day EMA, delivering bearish signals.

An AUD/USD move through R1 ($0.6550) would give the bulls a run at the 50-day EMA ($0.65679) and R2 ($0.6583). However, failure to move through the 50-day EMA ($0.65679) would leave S1 ($0.6493) in view. An AUD/USD move through the 50-day EMA would send a bullish signal.

NZD/USD Price Action

This morning, the NZD/USD was down 0.02% to $0.60422. A mixed start to the day saw the NZD/USD fall to an early low of $0.60348 before rising to a high of $0.60444.

Technical Indicators

Resistance & Support Levels

The NZD/USD has to move through the $0.6045 pivot to target the First Major Resistance Level (R1) at $0.6065 and the Tuesday high of $0.60667. A return to $0.6050 would signal a bullish session. However, the economic indicators and US debt ceiling news must support a session breakout.

In the case of a breakout session, the Kiwi would likely test resistance at the Second Major Resistance Level (R2) at $0.6087 and $0.61. The Third Major Resistance Level (R3) sits at $0.6128.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.6023 in play. However, barring a Washington-induced sell-off, the NZD/USD should steer clear of sub-$0.60. The Second Major Support Level (S2) at $0.6003 should limit the downside.

The Third Major Support Level (S3) sits at $0.5962.

Looking at the EMAs and the 4-hourly chart, the EMAs were bearish. The NZD/USD sits below the 50-day EMA, currently at $0.61230. The 50-day EMA slid back from the 100-day EMA, with the 100-day EMA pulling back from the 200-day EMA, delivering bearish signals.

An NZD/USD move through R1 ($0.6065) would give the bulls a run at R2 ($0.6087) and the 50-day EMA ($0.61230). However, failure to move through the 50-day EMA ($0.61230) would leave S1 ($0.6023) in view. A move through the 50-day EMA would send a bullish signal.