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

By:
Bob Mason
Updated: Jun 5, 2023, 00:11 GMT+00:00

It is a relatively busy day ahead for the AUD/USD and NZD/USD. China Caixin Services and Composite PMIs will draw interest ahead of the US session.

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

In this article:

It is a relatively busy Monday session for the AUD/USD and NZD/USD. Company gross profit numbers will provide the Aussie with direction.

However, economic indicators from China will influence both pairings. The Caixin Services and Composite PMI numbers will draw interest. Weaker-than-forecasted PMI numbers would weigh on the Aussie and the Kiwi. Economists forecast the Services PMI to fall from 56.4 to 55.0.

Looking ahead to the US session, the ISM Non-Manufacturing PMI will be the main report of the day. While the headline PMI figure will influence, investors should consider the sub-components, including employment, prices, and new orders Indexes.

AUD/USD Price Action

This morning, the AUD/USD was down 0.07% to $0.66005. A mixed start to the day saw the AUD/USD fall to an early low of $0.65983 before rising to a high of $0.66056.

AUD/USD sees red.
AUDUSD 050623 Daily Chart

Technical Indicators

Resistance & Support Levels

R1 – $ 0.6640 S1 – $ 0.6567
R2 – $ 0.6676 S2 – $ 0.6530
R3 – $ 0.6749 S3 – $ 0.6456

The AUD/USD needs to move through the $0.6603 pivot to target the First Major Resistance Level (R1) at $0.6640. A move through the Friday high of $0.66385 would signal a bullish session. However, economic indicators must support a breakout.

In case of a breakout session, the Aussie would likely test the Second Major Resistance Level (R2) at $0.6676. The Third Major Resistance Level (R3) sits at $0.6749.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.6567 in play. However, barring a risk-off-fueled sell-off, the AUD/USD pair should avoid sub-$0.65 and the Second Major Support Level (S2) at $0.6530.

The Third Major Support Level (S3) sits at $0.6456.

AUD/USD support levels in play below the pivot.
AUDUSD 050623 Hourly Chart

Looking at the EMAs and the 4-hourly chart, the EMAs sent bullish signals. The AUD/USD sits below the 200-day EMA, currently at $0.66298. The 50-day EMA narrowed to the 100-day EMA, with the 100-day EMA closing in on the 200-day EMA, delivering bullish signals.

An AUD/USD move through the 200-day EMA ($0.66298) and R1 ($0.6640) would give the bulls a run at R2 ($0.6676). However, a fall through the 100-day EMA ($0.65915) would bring S1 ($0.6567) and the 50-day EMA ($0.65628) into view. An AUD/USD fall through the 50-day EMA would send a bearish signal.

EMAs are bullish.
AUDUSD 050623 4 Hourly Chart

NZD/USD Price Action

This morning, the NZD/USD was up 0.02% to $0.60572. A mixed start to the day saw the NZD/USD fall to an early low of $0.60505 before rising to a high of $0.60586.

NZD/USD holds steady.
NZDUSD 050623 Daily Chart

Technical Indicators

Resistance & Support Levels

R1 – $ 0.6094 S1 – $ 0.6035
R2 – $ 0.6132 S2 – $ 0.6015
R3 – $ 0.6190 S3 – $ 0.5956

The NZD/USD has to move through the $0.6073 pivot to target the First Major Resistance Level (R1) at $0.6094 and the Friday high of $0.61112. A return to $0.6075 would signal a bullish session. However, the China PMI numbers must support a pre-US session breakout.

In the case of a breakout session, the Kiwi would likely test resistance at the Second Major Resistance Level (R2) at $0.6132. The Third Major Resistance Level (R3) sits at $0.6190.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.6035 in play. However, barring a risk-off-fueled sell-off, the NZD/USD should steer clear of sub-$0.60. The Second Major Support Level (S2) at $0.6015 should limit the downside.

The Third Major Support Level (S3) sits at $0.5956.

NZD/USD support levels in play below the pivot.
NZDUSD 050623 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 $0.60835. The 50-day EMA eased 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 the 50-day EMA ($0.60835) and R1 ($0.6094) would give the bulls a run at the 100-day EMA ($0.61317) and R2 ($0.6132). However, failure to move through the 50-day EMA ($0.60835) would leave S1 ($0.6035) in view. A move through the 50-day EMA would send a bullish signal.

EMAs are bearish.
NZDUSD 050623 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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