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AUD/USD and NZD/USD Fundamental Analysis: China Manufacturing PMI in Focus

By:
Bob Mason
Updated: May 31, 2023, 22:08 GMT+00:00

It is a busy day for the AUD/USD and NZD/USD. Manufacturing PMI numbers, US labor market stats, and the debt ceiling vote will be focal points.

AUD/USD and NZD/USD in the hands of US Debt Ceiling Deal - FX Empire

In this article:

It is a busy Thursday session for the AUD/USD. Finalized manufacturing PMI numbers for May kickstart the session, with wage growth and input and output price pressures likely focal points.

Finalized Australian retail sales and private new capex figures will also need consideration.

However, China’s all-important Caixin Manufacturing PMI survey will impact the AUD/USD and the NZD/USD pairings. The NBS private sector PMIs from China weighed on riskier assets on Wednesday, sending the Kiwi to sub-$0.60 and the Aussie to sub-$0.65.

Economists forecast the Caixin Manufacturing PMI to increase from 49.5 to 50.3.

Looking ahead to the US session, ADP nonfarm employment change, initial jobless claims, and the ISM Manufacturing PMI will move the dial. With investors pricing in a more hawkish Fed, solid labor market numbers could cement a 25-basis point June interest rate hike.

However, FOMC members and US debt ceiling-related news will also need consideration.

AUD/USD Price Action

This morning, the AUD/USD was down 0.01% to $0.65014. A mixed start to the day saw the AUD/USD fall to an early low of $0.64947 before rising to a high of $0.65030.

AUD/USD holds steady.
AUDUSD 010623 Daily Chart

Technical Indicators

Resistance & Support Levels

R1 – $ 0.6541 S1 – $ 0.6460
R2 – $ 0.6580 S2 – $ 0.6419
R3 – $ 0.6661 S3 – $ 0.6339

The AUD/USD needs to avoid the $0.6500 pivot to target the First Major Resistance Level (R1) at $0.6541. A move through the Wednesday high of $0.65387 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 $0.6580. The Third Major Resistance Level (R3) sits at $0.6661.

A fall through the pivot would bring the First Major Support Level (S1) at $0.6460 into play. However, barring a risk-off-fueled sell-off, the AUD/USD pair should avoid the Second Major Support Level (S2) at $0.6419.

The Third Major Support Level (S3) sits at $0.6339.

AUD/USD resistance level in play above the pivot.
AUDUSD 010623 Hourly Chart

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 $0.65504. 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 ($0.6541) and the 50-day EMA ($0.65504) would give the bulls a run at R2 ($0.6580). However, failure to move through the 50-day EMA ($0.65504) would leave S1 ($0.6460) in view. An AUD/USD move through the 50-day EMA would send a bullish signal.

EMAs are bearish.
AUDUSD 010623 4 Hourly Chart

NZD/USD Price Action

This morning, the NZD/USD was down 0.02% to $0.60170. A mixed start to the day saw the NZD/USD fall to an early low of $0.60079 before rising to a high of $0.60205.

NZD/USD holds steady.
NZDUSD 010623 Daily Chart

Technical Indicators

Resistance & Support Levels

R1 – $ 0.6050 S1 – $ 0.5986
R2 – $ 0.6082 S2 – $ 0.5953
R3 – $ 0.6146 S3 – $ 0.5889

The NZD/USD has to move through the $0.6018 pivot to target the First Major Resistance Level (R1) at $0.6050. A move through the Wednesday high of $0.60495 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 $0.6082 and $0.61. The Third Major Resistance Level (R3) sits at $0.6146.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.5986 in play. However, barring a risk-off-fueled sell-off, the NZD/USD should steer clear of sub-$0.5950. The Second Major Support Level (S2) at $0.5953 should limit the downside.

The Third Major Support Level (S3) sits at $0.5889.

NZD/USD support levels in play below the pivot.
NZDUSD 010623 Hourly Chart

Looking at the EMAs and the 4-hourly chart, the EMAs were bearish. The NZD/USD sits below the 50-day EMA, currently at $0.60976. 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 ($0.6050) would give the bulls a run at R2 ($0.6082) and the 50-day EMA ($0.60976). However, failure to move through the 50-day EMA ($0.60976) would leave S1 ($0.5986) in view. A move through the 50-day EMA would send a bullish signal.

EMAs are bearish.
NZDUSD 010623 4 Hourly Chart

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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