AUD/USD and NZD/USD Fundamental Daily Forecast – Downside Momentum Puts Aussie in Position to Challenge Multi-Year Low at .6973

The AUD/USD smashed through its October low at .7042 earlier in the session. The building downside momentum has put the Forex pair on course for a possible test of the February 9, 2016 main bottom at .6973. Momentum is also hitting the NZD/USD. However, it has room to go before it reaches its October bottom at .6424.
James Hyerczyk

The Australian Dollar and New Zealand Dollar are under pressure on Friday as the sell-off continues in the global equity markets. Today’s stock market rout was triggered late Thursday after Amazon reported a miss on revenue and guidance. The news triggered a 10% drop in the stock’s value. A decline in shares of Alphabet (Google’s Parent) is also contributing to the stock market plunge. It reported a miss on revenue, but beat on the bottom line.

At 1038 GMT, the AUD/USD is trading .7030, down 0.0049 or -0.68% and the NZD/USD is at .6469, down 0.0053 or -0.82%.

The weakness in the U.S. markets has spread to the Asian markets. Given its close economic relationship to not only China but many emerging markets across Asia, as well as being a highly-liquid currency compared to many Asian peers, the Aussie’s movement is often reflective of sentiment shifts towards the Chinese economy.

At 1043 GMT, Japan’s Nikkei 225 Index is trading 21184.60, down 84.13 or -0.40%. Australia’s S&P/ASX 200 is at 5665.20, up 1.10 or +0.02%. China’s Shanghai Index is at 2598.85, down 4.95 or -0.19%.

In other news, the Yuan hit a fresh 22-month low against the dollar on Friday, as a weaker-than-expected central bank fixing ramped up market views that authorities would allow larger declines in the currency.

In U.S. economic news on Thursday, Core Durable Goods Orders came in lower than expected at 0.1%, missing the 0.5% forecast. Durable Goods Orders, however, beat the -1.3% forecast with a 0.8% reading.

The Goods Trade Balance rose to -76.0 Billion. This was worse than the -74.9 Billion forecast. Preliminary Wholesale Inventories rose 0.3%, better than the 0.5% estimate. The previous reading was revised higher to 1.0%.

Weekly Unemployment Claims were 215K, slightly above the 214K forecast. Pending Home Sales improved nicely by 0.5%. This beat the -0.1% forecast.

In Fed news, Federal Reserve Vice Chairman Richard Clarida, in his first major policy speech since being seated at the central bank, said more interest rate increases are likely warranted as the economy continues to gather strength. In assessing current conditions, Clarida said growth broadly and with the job market in particular has surprised him.


The AUD/USD smashed through its October low at .7042 earlier in the session. The building downside momentum has put the Forex pair on course for a possible test of the February 9, 2016 main bottom at .6973.

Momentum is also hitting the NZD/USD. However, it has room to go before it reaches its October bottom at .6424.

While the primary focus will be on the volatility and direction of the stock market, traders will get a chance to reaction to a couple of key U.S. reports. Advance GDP is expected to come in at 3.3%, down from the previously reported 4.2%. The Advance GDP Price Index is forecast at 2.1%, down from 3.0%.

Revised University of Consumer Sentiment is expected to dip slightly to 98.9 from 99.0.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.