AUD/USD and NZD/USD Fundamental Analysis: US Debt Crisis Rolls On

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

The lack of stats will leave the pairs in the hands of market risk sentiment. However, we expect further reaction to the FOMC meeting minutes and US debt ceiling-related news.

Overnight, talks between the US administration and Republicans failed to deliver a deal, weighing on riskier assets as the June 1 deadline looms. The FOMC meeting minutes gave no surprises to distract investors from the debt ceiling crisis. There were no firm indications of what investors should expect in June. However, FOMC members raised concerns about the debt ceiling.

Looking ahead to the US session, Q1 GDP numbers and jobless claims will provide direction. An upward revision to prelim growth and a fall in jobless claims would support a more hawkish Fed policy outlook.

The US economy expanded by 1.1% in Q1, according to first estimates.

While the stats will draw interest, investors should consider FOMC member chatter, with FOMC member Collins speaking today. However, US debt ceiling-related news will remain the focal point.

AUD/USD Price Action

This morning, the AUD/USD was down 0.05% to $0.65404. A mixed start to the day saw the AUD/USD fall to an early low of $0.65371 before rising to a high of $0.65471.

Technical Indicators

Resistance & Support Levels

The AUD/USD needs to move through the $0.6563 pivot to target the First Major Resistance Level (R1) at $0.6596. A return to $0.6550 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 Wednesday high of $0.66153 but fall short of the Second Major Resistance Level (R2) at $0.6649. The Third Major Resistance Level (R3) sits at $0.6734.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.6510 in play. However, barring another risk-off-fueled sell-off, the AUD/USD pair should avoid sub $0.6450. The Second Major Support Level (S2) at $0.6477 should limit the downside.

The Third Major Support Level (S3) sits at $0.6391.

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 $0.66365. The 50-day EMA slid back from the 100-day EMA, with the 100-day EMA pulling back from the 200-day EMA, delivering bearish signals.

An AUD/USD move through R1 ($0.6596) would give the bulls a run at the Thursday high of $0.66153 and the 50-day EMA ($0.66365). However, failure to move through the 50-day EMA ($0.66365) would leave S1 ($0.6510) 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 0.08% to $0.61073. A mixed start to the day saw the NZD/USD fall to an early low of $0.61035 before rising to a high of $0.61130.

Technical Indicators

Resistance & Support Levels

The NZD/USD has to move through the $0.6154 pivot to target the First Major Resistance Level (R1) at $0.6215. A return to $0.62 would signal a bullish session. However, US debt ceiling news must support a session breakout.

In the case of a breakout session, the Kiwi would likely test resistance at the Wednesday high of $0.62567 but fall short of the Second Major Resistance Level (R2) at $0.6317. The Third Major Resistance Level (R3) sits at $0.6480.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.6051 in play. However, barring a Washington-induced sell-off, the NZD/USD should steer clear of sub-$0.60 and the Second Major Support Level (S2) at $0.5991.

The Third Major Support Level (S3) sits at $0.5828.

Looking at the EMAs and the 4-hourly chart, the EMAs were bearish. The NZD/USD sits below the 50-day EMA, currently at $0.62328. The 50-day EMA pulled back from the 200-day EMA, with the 100-day EMA converging on the 200-day EMA, delivering bearish signals.

An NZD/USD move through R1 ($0.6215) would give the bulls a run at the EMAs and the Wednesday high of $0.62567. However, failure to move through the 50-day EMA ($0.62328) would leave S1 ($0.6051) in play. A move through the 50-day EMA would send a bullish signal.