AUD/USD and NZD/USD Fundamental Analysis: Flash PMIs in Focus

It was a relatively busy start to the morning for the AUD/USD. Flash private sector PMIs for April were in focus this morning. Service sector activity returned to growth at the start of the second quarter, while the manufacturing sector continued to contract.

The Judo Bank Manufacturing PMI fell from 49.1 to 48.1 in April, while the Services PMI rose from 48.6 to a 10-month high of 52.6. Economists forecast PMIs of 48.0 and 47.0, respectively.

According to the flash survey,

• The Composite PMI Output Index rose from 48.5 to a 10-month high of 52.2.
• News orders increased marginally across the services sector while falling sharply across the manufacturing sector.
• Private sector firms hired at the fastest pace since January, with both sectors increasing staff levels.
• Input prices increased at a less marked pace for the fifth consecutive month, while output price inflation picked up.

However, there were no stats from New Zealand to influence the NZD/USD. After cooler-than-expected Q1 inflation figures on Thursday, the lack of stats will leave the Kiwi dollar in the hands of market risk sentiment. Flash private sector PMIs from the euro area and the US will influence risk sentiment.

While the headline figures will draw interest, investors should consider the sub-components, with employment, prices, and new orders likely to influence. Investors should also monitor FOMC member commentary.

AUD/USD Price Action

The Aussie was up 0.02% to $0.67426. A range-bound start to the day saw the AUD/USD rise to an early high of $0.67450 before easing back.

Technical Indicators

Resistance & Support Levels

The AUD/USD needs to avoid the $0.6737 pivot to target the First Major Resistance Level (R1) at $0.6776. A move through the Thursday high of $0.67717 would signal a bullish session. However, the Aussie Dollar would need risk-on sentiment to support a pre-US session breakout.

In the case of another breakout session, the Aussie would likely test the Second Major Resistance Level (R2) at $0.6811. The Third Major Resistance Level (R3) sits at $0.6886.

A fall through the pivot would bring the First Major Support Level (S1) at $0.6702 into play. However, barring a risk-off-fueled sell-off, the AUD/USD pair should avoid the Second Major Support Level (S2) at $0.6662.

The Third Major Support Level (S3) sits at $0.6587.

Looking at the EMAs and the 4-hourly chart, the EMAs send bullish signals. The AUD/USD sits above the 200-day EMA, currently at $0.67182. The 50-day EMA closed in on the 200-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.

A hold above 200-day ($0.67182) EMAs would support a breakout from R1 ($0.6776) to give the bulls a run at the R2 ($0.6811). However, a fall through the 200-day ($0.67182) and 50-day ($0.67156) EMAs would bring the 100-day EMA ($0.67080) and S1 ($0.6702) into view. The fall through the 50-day EMA would send a bearish signal. However, a bullish cross of the 50-day EMA through the 200-day EMA would signal a bullish session.

NZD/USD Price Action

This morning, the Kiwi was up 0.16% to $0.61760. A bullish start to the day saw the NZD/USD rise from an early low of $0.61654 to a high of $0.61794.

Technical Indicators

Resistance & Support Levels

The NZD/USD has to avoid the $0.6174 pivot to target the First Major Resistance Level (R1) at $0.6198 and the Thursday high of $0.6206. A return to $0.62 would signal a bullish session. However, market risk sentiment must support a breakout.

In the case of a breakout session, the Kiwi would likely test the Second Major Resistance Level (R2) at $0.6231. The Third Major Resistance Level (R3) sits at $0.6288.

A fall through the pivot would bring the First Major Support Level (S1) at $0.6141 into play. However, barring a data-fueled sell-off, the NZD/USD pair would likely avoid the Second Major Support Level (S2) at $0.6117.

The Third Major Support Level (S3) sits at $0.6060.

Looking at the EMAs and the 4-hourly chart, the EMAs send bearish signals. The NZD/USD sits below the 50-day EMA, currently at $0.62095. The 50-day EMA fell back from the 100-day and 200-day EMAs, with the 100-day EMA pulling back from the 200-day EMA, delivering bearish signals.

A move through R1 ($0.6198) and the 50-day EMA ($0.62095) would give the bulls a run at the 100-day EMA ($0.62218) and R2 ($0.6231). However, failure to move through the 50-day EMA ($0.62095) would leave S1 ($0.6141) in play. A move through the 50-day EMA would send a bullish signal.