AUD/USD and NZD/USD Fundamental Analysis: China Trade in Focus

It is a busy morning for the AUD/USD and NZD/USD. This morning, New Zealand electronic card retail sales drew interest. Following the RBNZ surprise 50-basis point interest rate hike, a further pickup in spending would keep pressure on the RBNZ to cool consumption.

Electronic card retail sales rose by 0.7% in April versus a forecasted 0.2% decline. In March, electronic card retail sales increased by 0.7%.

Later this morning, Westpac Consumer Sentiment and finalized retail sales figures will also be in focus. Barring a revision to the retail sales figures, we expect the consumer sentiment number to garner more interest.

However, trade data from China will likely have more impact following the disappointing private sector PMI numbers for April. Economists forecast the dollar trade surplus to narrow from $88.19 billion to $71.60 billion, with imports expected to fall by 5% and exports to rise by 8% year-over-year.

Later today, there are no US economic indicators for investors to consider. A lack of stats will leave Fed chatter and market risk sentiment to influence.

AUD/USD Price Action

This morning, the AUD/USD was up 0.03% to $0.67809. A mixed start to the day saw the AUD/USD fall to an early low of $0.67769 before rising to a high of $0.67826.

Technical Indicators

Resistance & Support Levels

The AUD/USD needs to avoid the $0.6774 pivot to target the First Major Resistance Level (R1) at $0.6809. A move through the Monday high of $0.68036 would signal a bullish session. However, the Aussie would need economic indicators from Australia and China to support a pre-US session breakout.

In case of a breakout session, the Aussie would likely test the Second Major Resistance Level (R2) at $0.6838. The Third Major Resistance Level (R3) sits at $0.6902.

A fall through the pivot would bring the First Major Support Level (S1) at $0.6745 into play. However, barring a data-fueled sell-off, the AUD/USD pair should avoid the Second Major Support Level (S2) at $0.6711.

The Third Major Support Level (S3) sits at $0.6647.

Looking at the EMAs and the 4-hourly chart, the EMAs sent bullish signals. The AUD/USD sits above the 50-day EMA, currently at $0.67010. The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above the Major Support Levels and the 50-day EMA ($0.67010) would support a breakout from R1 ($0.6809) to target R2 ($0.6838). However, a fall through S1 ($0.6745) would bring S2 ($0.6711) and the 50-day ($0.67010) into view. A fall through the 50-day EMA would be a bearish signal.

NZD/USD Price Action

This morning, the NZD/USD was up 0.03% to $0.63345. A mixed start to the day saw the NZD/USD fall to an early low of $0.63381 before rising to a high of $0.63461.

Technical Indicators

Resistance & Support Levels

The NZD/USD has to avoid the $0.6330 pivot to target the First Major Resistance Level (R1) at $0.6372. A move through the Monday high of $0.63593 would signal a bullish session. However, the economic indicators from China must support a pre-US session breakout.

In the case of a breakout session, the Kiwi would likely test the Second Major Resistance Level (R2) at $0.6401. The Third Major Resistance Level (R3) sits at $0.6472.

A fall through the pivot would bring the First Major Support Level (S1) at $0.6301 into play. However, barring a data-off-fueled sell-off, the NZD/USD should steer clear of the Second Major Support Level (S2) at $0.6259.

The Third Major Support Level (S3) sits at $0.6188.

Looking at the EMAs and the 4-hourly chart, the EMAs sent bullish signals. The NZD/USD sits above the 50-day EMA, currently at $0.62474. The 50-day EMA pulled away from the 200-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above the Major Support Levels and the 50-day EMA ($0.62474) would support a breakout from R1 ($0.6372) to target R2 ($0.6401). However, a fall through S1 ($0.6301) would bring S2 ($0.6259) and the 50-day EMA ($0.62474) into play. A fall through the 50-day EMA would send a bearish signal.