AUD/USD and NZD/USD Fundamental Analysis: UBS Deal Gives Support

It is a quiet start to the week for the AUD/USD and the NZD/USD pairs. There are no economic indicators from Australia or New Zealand to provide direction.

While there are no stats to consider, RBA Assistant Governor Kent will speak this morning. Forward guidance on monetary policy will draw interest along with comments relating to the banking crisis in the US and Europe.

With the RBA Meeting Minutes out tomorrow, talk of nearing levels to pause interest rate hikes would test support for the AUD/USD. Philip Lowe delivered an unexpectedly dovish policy outlook in early March, signaling a near-term pause.

However, news of UBS AG (UBS) acquiring Credit Suisse Group AG (CS) supported the pair this morning.

Later today, there are no US economic indicators to influence.

AUD/USD Price Action

The Aussie was up 0.14% to $0.67078. A bullish start to the day saw the AUD/USD rise to an early high of $0.67187 before easing back.

Technical Indicators

The AUD/USD needs to avoid the $0.6689 pivot to target the First Major Resistance Level (R1) at $0.6734. A move through the Friday high of $0.67241 would signal a bullish session. However, the Aussie Dollar would need a further shift in market risk sentiment to support a breakout day.

In case of a breakout session, the Aussie would likely test the Second Major Resistance Level (R2) at $0.6769. The Third Major Resistance Level (R3) sits at $0.6850.

A fall through the pivot would bring the First Major Support Level (S1) at $0.6653 into play. However, barring another risk-off-fueled sell-off, the AUD/USD pair should avoid sub-$0.6650 and the Second Major Support Level (S2) at $0.6608.

The Third Major Support Level (S3) sits at $0.6528.

Looking at the EMAs and the 4-hourly chart, the EMAs send a bullish signal. The AUD/USD sits below the 100-day EMA, currently at $0.67037. The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.

A move through the 100-day EMA (0.67037) would support a breakout from R1 ($0.6734) to give the bulls a run at the 200-day EMA ($0.67654) and R2 ($0.6769). However, a fall through the 50-day EMA ($0.66678) would bring the First Major Support Level (S1) at $0.6653 into play. A fall through the 50-day EMA would send a bearish signal.

NZD/USD Price Action

This morning, the Kiwi was up 0.28% to $0.62759. A bullish start to the day saw the NZD/USD rise to an early high of $0.62810 before easing back.

Technical Indicators

The NZD/USD needs to avoid the $0.6239 pivot to target the First Major Resistance Level (R1) at $0.6296. A move through the Friday high of $0.62772 would signal a bullish session. However, market risk sentiment will remain the key driver.

In the case of a breakout session, the Kiwi would likely test the Second Major Resistance Level (R2) at $0.6334 and resistance at $0.6250. The Third Major Resistance Level (R3) sits at $0.6429.

A fall through the pivot would bring the First Major Support Level (S1) at $0.6202 into play. However, barring a risk-off-fueled sell-off, the NZD/USD pair would likely avoid sub-$0.62 and the Second Major Support Level (S2) at $0.6145.

The Third Major Support Level (S3) sits at $0.6050.

Looking at the EMAs and the 4-hourly chart, the EMAs send a bullish signal. The NZD/USD sits above the 200-day EMA, currently at $0.62401. The 50-day closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.

An NZD/USD hold above the 200-day EMA ($0.62401) would support a breakout from R1 ($0.6296) to target R2 ($0.6334). However, a fall through the 200-day EMA ($0.62401) would bring the 100-day EMA ($0.62061) and S1 ($0.6202) into play. A bullish cross of the 50-day EMA through the 100-day EMA would send a bullish signal.