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

It is a busy Wednesday for the NZD/USD. New Zealand retail sales figures for Q1 will be in focus shortly. Economists forecast a modest 0.2% increase in Q1 versus a 0.6% decline in Q4. While the numbers will draw interest, the RBNZ interest rate decision, monetary policy statement, and press conference will be the focal points.

Economists expect the RBNZ to raise interest rates by 25 basis points this morning. A 25-basis point hike would give the statement and press conference more influence. It is unclear whether the US debt ceiling crisis will force the RBNZ to stand pat this morning.

However, there are no economic indicators to influence the AUD/USD. The lack of stats will leave market risk sentiment to provide direction. Fed chatter and US debt ceiling-related news will draw interest.

Later today, US Treasury Secretary Janet Yellen will also move the dial, with investors mindful of the rising threat of a US default. However, there are no US economic indicators to distract investors, while crude oil inventories will need consideration.

AUD/USD Price Action

This morning, the AUD/USD was up 0.02% to $0.66103. A mixed start to the day saw the AUD/USD fall to an early low of $0.66077 before rising to a high of $0.66116.

Technical Indicators

Resistance & Support Levels

The AUD/USD needs to move through the $0.6626 pivot to target the First Major Resistance Level (R1) at $0.6645. A return to $0.6630 would signal a bullish session. However, debt ceiling news must support a breakout.

In case of a breakout session, the Aussie would likely test resistance at the Tuesday high of $0.66619 but fall short of the Second Major Resistance Level (R2) at $0.6681. The Third Major Resistance Level (R3) sits at $0.6735.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.6590 in play. However, barring a risk-off-fueled sell-off, the AUD/USD pair should avoid sub $0.6550. The Second Major Support Level (S2) at $0.6571 should limit the downside.

The Third Major Support Level (S3) sits at $0.6517.

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 $0.66573. The 50-day EMA pulled back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish signals.

An AUD/USD move through R1 ($0.6645) and the 50-day EMA ($0.66573) would support a run at the 100-day EMA ($0.66723). However, failure to move through the 50-day EMA ($0.66573) would leave S1 ($0.6590) in view. An AUD/USD move through the 50-day EMA would send a bullish signal.

NZD/USD Price Action

This morning, the NZD/USD was down 0.02% to $0.62462. A mixed start to the day saw the NZD/USD fall to an early low of $0.62365 before rising to a high of $0.62480.

Technical Indicators

Resistance & Support Levels

The NZD/USD has to move through the $0.6261 pivot to target the First Major Resistance Level (R1) at $0.6289. A return to $0.6250 would signal a bullish session. However, US debt ceiling news and the RBNZ must support a session breakout.

In the case of a breakout session, the Kiwi would likely test resistance at the Tuesday high of $0.63025 but fall short of the Second Major Resistance Level (R2) at $0.6330. The Third Major Resistance Level (R3) sits at $0.6399.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.6220 in play. However, barring an RBNZ-fueled sell-off, the NZD/USD should steer clear of sub-$0.62 and the Second Major Support Level (S2) at $0.6192.

The Third Major Support Level (S3) sits at $0.6124.

Looking at the EMAs and the 4-hourly chart, the EMAs turned bearish. The NZD/USD sits below the 100-day EMA, currently at $0.62549. The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bearish signals.

An NZD/USD move through the 100-day ($0.62549) and 50-day ($0.62619) EMAs would give the bulls a run at R1 ($0.6289) and the Tuesday high of $0.63025. However, a fall through the 200-day EMA ($0.62445) would bring S1 ($0.6220) into play. A move through the 50-day EMA would send a bullish signal.