AUD/USD and NZD/USD Fundamental Analysis: Bearish Mood Lingers

It is a quiet Thursday for the AUD/USD and the NZD/USD pairs. There are no material stats for the markets to consider. The lack of stats will leave recent economic indicators and central bank commentary to resonate.

Recent GDP numbers from New Zealand and inflation figures from Australia support a pause on the monetary policy front.

Adding to the bearish mood are fears of lackluster growth in China and the threat of a global credit crunch stemming from synchronized interest rate hikes of central banks. The impact of the rate hikes is evident in the banking system but has yet to hit the respective economies.

Later today, US economic indicators will provide direction, with Q4 GDP and initial jobless claims in focus. Barring a material revision to the Q4 GDP, the initial jobless claims should have more influence.

Investors should also monitor central bank chatter throughout the day.

AUD/USD Price Action

The Aussie was up 0.01% to $0.66848. A mixed start to the day saw the AUD/USD fall to an early low of $0.66757 before finding support.

Technical Indicators

The AUD/USD needs to move through the $0.6686 pivot to target the First Major Resistance Level (R1) at $0.6711 and the Wednesday high of $0.67131. A return to $0.67 would signal a bullish session. However, the Aussie Dollar would market risk sentiment to support a breakout day.

In case of a breakout session, the Aussie would likely test the Second Major Resistance Level (R2) at $0.67538 and resistance at $0.6750. The Third Major Resistance Level (R3) sits at $0.6790.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.6659 in play. However, barring a risk-off-fueled sell-off, the AUD/USD pair should avoid sub-$0.66. The Second Major Support Level (S2) at $0.6634 should limit the downside.

The Third Major Support Level (S3) sits at $0.6583.

Looking at the EMAs and the 4-hourly chart, the EMAs send mixed signals. The AUD/USD sits above the 50-day EMA, currently at $0.66775. The 50-day EMA closed in on the 100-day EMA, while the 100-day EMA eased back from the 200-day EMA, delivering mixed signals.

A move through the 100-day EMA ($0.66891) would support a breakout from R1 ($0.6711) to target the 200-day EMA ($0.67331) and R2 ($0.6738). However, a fall through the 50-day EMA ($0.66775) would bring S1 ($0.6659) into play. A fall through the 50-day EMA would send a bearish signal.

NZD/USD Price Action

This morning, the Kiwi was down 0.02% to $0.62228. A mixed start to the day saw the NZD/USD rise to an early high of $0.62257 before falling into the red.

Technical Indicators

The NZD/USD needs to move through the $0.6236 pivot to target the First Major Resistance Level (R1) at $0.6258. A return to $0.6250 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 resistance at the Wednesday high of $0.62709 but fall short of the Second Major Resistance Level (R2) at $0.6293. The Third Major Resistance Level (R3) sits at $0.6349.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.6202 in play. However, barring a risk-off-fueled sell-off, the NZD/USD pair would likely avoid sub-$0.6150. The Second Major Support Level (S2) at $0.6180 should limit the downside.

The Third Major Support Level (S3) sits at $0.6124.

Looking at the EMAs and the 4-hourly chart, the EMAs send bullish signals. The NZD/USD sits above the 50-day EMA, currently at $0.62218. The 50-day closed in on the 200-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.

A hold above the 50-day EMA ($0.62218) would support a breakout from the 200-day EMA ($0.62344) to target R1 ($0.6258) and the Wednesday high of $0.62709. However, a fall through the 50-day ($0.62218) and 100-day ($0.62179) EMAs would give the bears a run at S1 ($0.6202) and sub-$0.62. A fall through the 50-day EMA would send a bearish signal.