AUD/USD and NZD/USD Fundamental Analysis: Aussie Retail Sales in Focus

Highlights

• The AUD/USD and the NZD/USD are in action this morning. NZ business confidence and Australian retail sales are in focus.
• On Wednesday, inflation numbers from Australia shut the door on further RBA rate hikes near-term, limiting the impact of today’s numbers on the Aussie.
• Later today, Fed Chair Powell, US Q4 GDP, and initial jobless claims will move the dial.

It is a busier start to the day for the AUD/USD and the NZD/USD. ANZ Business Confidence numbers for New Zealand and retail sales figures for Australia will be in focus.

For the Aussie, a surge in retail sales could reopen the door to further RBA moves to curb spending and tame inflation. However, Australian inflation numbers from Tuesday suggest today’s retail sales figures will have a limited impact on sentiment toward RBA monetary policy.

In contrast, we expect Kiwi dollar sensitivity to the business confidence report. A pickup in business confidence would signal increased spending to support the economy and the Kiwi dollar. Economists forecast the ANZ Business Confidence Index to rise from -31.1 to -28.1.

Investors should look beyond the headline number. Wage, inflation, and cost expectations will be likely focal points.

The US Session

Looking at the US session, Q4 GDP and initial jobless claims will also need consideration. After Fed Chair Powell’s hawkish comments on Wednesday, sentiment toward Fed monetary policy turned more hawkish.

According to the CME FedWatch Tool, the probability of a 25-basis point July Fed rate hike stood at 81.8% versus 76.9% on Tuesday. Significantly, the chances of the Fed lifting rates to 5.75% in September stood at 16.4%, up from 15.4% on Tuesday.

Ahead of the US session, Fed Chair Powell will be speaking again. However, the Fed Chair musts deviate from previous scripts to move the dial.

AUD/USD Price Action

This morning, the AUD/USD was up 0.03% to $0.66008. A mixed start to the day saw the AUD/USD fall to an early low of $0.65972 before rising to a high of $0.66022.

Technical Indicators

Looking at the EMAs and the 4-hourly chart, the EMAs sent bearish signals. The AUD/USD sat below the 200-day EMA, currently at $0.66998. The 50-day EMA closed in on the 200-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bearish signals.

A move through R1 ($0.6628) would give the bulls a run at the EMAs. However, failure to move through the 200-day EMA ($0.66998) would leave S1 ($0.6568) in view. An AUD/USD move through the 50-day EMA (0.67067) would send a bullish signal.

Resistance & Support Levels

NZD/USD Price Action

This morning, the NZD/USD was down 0.03% to $0.60730. A mixed start to the day saw the NZD/USD rise to an early high of $0.60761 before falling to a low of $0.60697.

Technical Indicators

Looking at the EMAs and the 4-hourly chart, the EMAs sent bearish signals. The NZD/USD sat below the 50-day EMA, currently at $0.61509. The 50-day EMA crossed through the 100-day EMA, with the 100-day EMA pulling back from the 200-day EMA, delivering bearish signals.

A move through R1 ($0.6138) would give the bulls a run at the 50-day ($0.61509) and 100-day ($0.61520) EMAs. However, failure to move through 50-day EMA ($0.61509) would leave S1 ($0.6040) in view. A move through the 50-day EMA would signal a breakout session.

Resistance & Support Levels