AUD/USD and NZD/USD Fundamental Analysis: Aussie Inflation in Focus
It is a relatively quiet Wednesday for the AUD/USD and the NZD/USD pairs. Australian inflation figures for February are in the spotlight this morning.
Following better-than-expected but lackluster retail sales figures on Tuesday, the RBA would need to see a pickup in inflationary pressure to test the pause theory.
Softer inflation figures would give the RBA greater incentive to hit pause at the April 4 meeting. According to the RBA meeting minutes from March, board members agreed to consider hitting pause next month. Members cited concerns about the economy, with economic indicators coming in weaker than expected.
Economists forecast the monthly CPI Indicator to soften from 7.4% to 7.1% in February.
With no stats from New Zealand for investors to consider, market risk sentiment will continue to influence. On Tuesday, the Federal Reserve defended its decision to let Silicon Valley Bank collapse. Easing banking sector-related jitters supported the Kiwi Dollar return to $0.6250 on Tuesday.
AUD/USD Price Action
The Aussie was down 0.04% to $0.67055. A bearish start to the day saw the AUD/USD fall to an early low of $0.67011 before steadying.
Technical Indicators
The AUD/USD needs to avoid the $0.6687 pivot to target the First Major Resistance Level (R1) at $0.6731. A move through the Tuesday high of $0.67102 would signal a bullish session. However, the Aussie Dollar would need hotter-than-expected inflation figures to support a breakout day.
In case of a breakout session, the Aussie would likely test the Second Major Resistance Level (R2) at $0.6754. The Third Major Resistance Level (R3) sits at $0.6820.
A fall through the pivot would bring the First Major Support Level (S1) at $0.6665 into play. However, barring a risk-off-fueled sell-off, the AUD/USD pair should avoid sub-$0.6650 and the Second Major Support Level (S2) at $0.6621.
The Third Major Support Level (S3) sits at $0.6555.
Looking at the EMAs and the 4-hourly chart, the EMAs send bullish signals. The AUD/USD sits above the 100-day EMA, currently at $0.66902. The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.
A move and R1 ($0.6731) and the 200-day EMA ($0.67364) would give the bulls a run at R2 ($0.6754). However, a fall through the 100-day EMA ($0.66902) would bring the 50-day EMA ($0.66766) and S1 ($0.6665) into play. A fall through the 50-day EMA would send a bearish signal.
NZD/USD Price Action
This morning, the Kiwi was down 0.05% to $0.62495. A bearish start to the day saw the NZD/USD fall to an early low of $0.62399 before finding support.
Technical Indicators
The NZD/USD needs to avoid a fall through the $0.6234 pivot to target the First Major Resistance Level (R1) at $0.6273. A move through the Tuesday high of $0.62549 would signal a bullish session. However, market risk sentiment will remain the key driver.
In the case of a breakout session, the Kiwi would likely test the Second Major Resistance Level (R2) at $0.6294 and resistance at $0.63. The Third Major Resistance Level (R3) sits at $0.6353.
A fall through the pivot would bring the First Major Support Level (S1) at $0.6214 into play. However, barring a risk-off-fueled sell-off, the NZD/USD pair would likely avoid sub-$0.62 and the Second Major Support Level (S2) at $0.6175.
The Third Major Support Level (S3) sits at $0.6115.
Looking at the EMAs and the 4-hourly chart, the EMAs send bullish signals. The NZD/USD sits above the 200-day EMA, currently at $0.62345. The 50-day pulled away from the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.
A hold above the 200-day EMA ($0.62345) would support a breakout from R1 ($0.6273) to target R2 ($0.6294) and $0.63. However, a fall through the 200-day EMA ($0.62345) would give the bears a run at the 50-day ($0.62192) and the 100-day (0.62161) EMAs and S1 ($0.6214). A fall through the 50-day EMA would send a bearish signal.
