AUD/USD and NZD/USD Fundamental Analysis: RBA in the Spotlight

Highlights

• The AUD/USD and the NZD/USD had a steady start to the Tuesday session.
• This morning, there are no economic indicators from Australia or New Zealand to move the dial, leaving the RBA meeting minutes in focus.
• However, US retail sales figures will also need consideration later in the day.

It is a quiet start to the day for the AUD/USD and NZD/USD on Tuesday. There are no economic indicators from Australia or New Zealand for investors to consider this morning.

While there are no economic indicators to consider, the RBA meeting minutes will draw interest. The RBA surprised the markets for a second month in July by holding interest rates unchanged at 4.10%. Economists had forecast a 25-basis point interest rate hike to 4.25%.

However, the RBA Rate Statement did not close the door on further tightening, placing more weightage on the RBA meeting minutes. Hawkish minutes would fuel another Aussie dollar breakout as investors expect the Fed to wrap up its monetary policy tightening cycle later this month.

The European Session

It is a quiet day ahead on the European economic calendar. There are no economic indicators to influence the Aussie or the Kiwi.

The US Session

It is a busy day on the US economic calendar. US retail sales figures for June will draw interest later in the day.

While the markets expect the Fed to hit the brakes after the summer, a sharp pickup in consumption and sticky inflation could reignite bets of a September move. Economists forecast retail sales to increase by 0.5% in June versus 0.3% in May.

AUD/USD Price Action

Daily Chart

The Daily Chart showed the AUD/USD sitting above the psychological $0.68 support level and the $0.6755 – $0.6729 support band.

Notably, the AUD/USD remained above the 50-day ($0.67121) and 200-day ($0.67511) EMAs, signaling bullish momentum over the near and longer-term time horizons.

The 50-day EMA closed in on the 200-day EMA and reflected bullish momentum despite two consecutive days in the red.

Looking at the 14-Daily RSI, the 58.91 reading signals a bullish trend and suggests a run at the $0.6878 – $0.6905 resistance band. However, a fall to sub-$0.68 would bring the upper level of the $0.6755 – $0.6729 support band and the 200-day EMA ($0.67511) into play.

4-Hourly Chart

Looking at the 4-Hourly Chart, the AUD/USD faces resistance at the $0.6850 psychological level. After the Monday session, the AUD/USD sits below the $0.6878 – $0.6905 resistance band.

However, the AUD/USD remains above the 50-day ($0.67657) and 200-day ($0.67128) EMAs, sending bullish signals. Significantly, the 50-day EMA pulled away from the 200-day EMA, supporting a run at $0.6850.

The AUD/USD must avoid sub-$0.68 and the $0.6755 – $0.6729 support band to target $0.6850.

Looking at the RSI indicator, the 14-4H RSI reading of 54.64 indicates bullish momentum, with buying pressure outweighing selling pressure. The RSI is aligned with EMAs and supports a run at $0.6850.

NZD/USD Price Action

Daily Chart

The Daily Chart showed the NZD/USD sitting below the $0.6397 – $0.6380 resistance band. However, the EMAs sent bullish signals. The Kiwi dollar sat above the 50-day ($0.62005) and 200-day ($0.62267), sending bullish near and longer-term signals.

Notably, the 50-day EMA closed in on the 200-day EMA, supporting the currently bullish near-term trend.

Looking at the 14-Daily RSI, the 61.62 reading sends bullish price signals. A breakout from $0.6350 would bring the $0.6380 – $0.6397 resistance band into play.

4-Hourly Chart

Looking at the 4-Hourly Chart, the NZD/USD faces strong resistance at the $0.6350 psychological level. After the bearish Monday session, the NZD/USD sits below the $0.6380 – $0.6397 resistance band. However, the NZD/USD holds above 50-day ($0.62780) and 200-day ($0.61997) EMAs, supporting a run at the $0.6380 – $0.6397 resistance band.

Notably, the 50-day EMA pulled further away from the 200-day EMA, a bullish signal.

The 14-4H RSI reading of 51.80 signals moderately bullish momentum, with buying pressure outweighing selling pressure. Significantly, the 14-4H RSI aligns with the EMAs and signals a run at the $0.6380 – $0.6397 resistance band. However, economic indicators from the US must support a breakout session.