AUD/USD and NZD/USD Fundamental Analysis: China CPI in View
It is a quiet Friday session for the AUD/USD and NZD/USD. There are no economic indicators from Australia or New Zealand to consider this morning. However, May inflation figures from China will impact market risk sentiment and the pairings.
Wholesale inflation numbers for April signaled weak demand, with the producer price index falling by 3.6% year-over-year.
Economists forecast the producer price index to decline by 2.8% in May, which would support a pickup in demand. However, a more marked fall in the producer price index would weigh on riskier assets and the AUD/USD and NZD/USD pairings.
Eying the US session, there are no US economic indicators to shift the mood following the jobless claims on Thursday.
AUD/USD Price Action
This morning, the AUD/USD was down 0.02% to $0.67141. A mixed start to the session saw the AUD/UD fall to an early low of $0.67056 before rising to a high of $0.67167.
Technical Indicators
Resistance & Support Levels
| R1 – $ | 0.6739 | S1 – $ | 0.6671 |
| R2 – $ | 0.6763 | S2 – $ | 0.6626 |
| R3 – $ | 0.6831 | S3 – $ | 0.6558 |
The AUD/USD needs to avoid the $0.6695 pivot to target the First Major Resistance Level (R1) at $0.6739. A move through the Thursday high of $0.67181 would signal a breakout session. However, the China inflation numbers must support a breakout.
In case of a breakout session, the Aussie would likely test the Second Major Resistance Level (R2) at $0.6763. The Third Major Resistance Level (R3) sits at $0.6831.
A fall through the pivot would bring the First Major Support Level (S1) at $0.6671 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 $0.6626.
The Third Major Support Level (S3) sits at $0.6558.
Looking at the EMAs and the 4-hourly chart, the EMAs sent bullish signals. The AUD/USD sat above the 200-day EMA, currently at $0.66369. The 50-day EMA closed in on the 200-day EMA, with the 100-day EMA narrowing on the 200-day EMA, delivering bullish signals.
A bullish cross of the 50-day EMA through the 200-day EMA would support a breakout from R1 ($0.6739) to give the bulls a run at R2 ($0.6763). However, a fall through S1 ($0.6671) would bring the 200-day ($0.66369) and 50-day ($0.66286) EMAs into view. An AUD/USD fall through the 50-day EMA would send a bearish signal.
NZD/USD Price Action
This morning, the NZD/USD was up 0.03% to $0.60963. A mixed start to the day saw the NZD/USD fall to an early low of $0.60848 before rising to a high of $0.60976.
Technical Indicators
Resistance & Support Levels
| R1 – $ | 0.6119 | S1 – $ | 0.6051 |
| R2 – $ | 0.6143 | S2 – $ | 0.6008 |
| R3 – $ | 0.6210 | S3 – $ | 0.5940 |
The NZD/USD has to avoid the $0.6075 pivot to target the First Major Resistance Level (R1) at $0.6119. A move through the Thursday high of $0.60991 would signal a bullish session. However, the Kiwi would need the inflation numbers from China to support a breakout.
In the case of a breakout session, the Kiwi would likely test the Second Major Resistance Level (R2) at $0.6143 and resistance at $0.6150. The Third Major Resistance Level (R3) sits at $0.6210.
A fall through the pivot would bring the First Major Support Level (S1) at $0.6051 into play. However, barring a risk-off-fueled sell-off, the NZD/USD should steer clear of sub-$0.6050 and the Second Major Support Level (S2) at $0.6008.
The Third Major Support Level (S3) sits at $0.5940.
Looking at the EMAs and the 4-hourly chart, the EMAs sent mixed signals. The NZD/USD sat below the 100-day EMA, currently at $0.61086. The 50-day EMA narrowed to the 100-day EMA, while the 100-day EMA eased back from the 200-day EMA, delivering mixed signals.
An NZD/USD breakout from the 100-day EMA ($0.61086) and R1 ($0.6119) would give the bulls a run at R2 ($0.6143) and the 200-day EMA ($0.61512). However, a fall through the 50-day EMA ($0.60762) would bring S1 ($0.6051) into view. A fall through the 50-day EMA would send a bearish signal.
