AUD/USD and NZD/USD Fundamental Daily Forecast – Traders More Optimistic About Kiwi

The Australian Dollar finished slightly lower on Friday, but with U.S. and Australian banks closed for Good Friday, the price action was likely fueled by computer-driven trading.

The AUD/USD settled at .7676, down 0.0002 or -0.03%.

Initially, the Forex pair rallied, driven by end-of-the-week, month and quarterly position-squaring, however, the buying wasn’t strong enough to sustain the rally. This was likely because of the extremely low pre-holiday volume and the bearish fundamentals. Additionally, just a day before, the Aussie had traded down to its lowest level since December 15.

The economic data was light all week. HIA new home sales (0.7% vs. -2.1% prior) were better than previous figures. Reserve Bank of Australia Assistant Governor Kent suggested that the outlook for the Australian economy was upbeat. Finally, month-over-month private sector credit (0.4% vs. 0.3% expected was slightly better than expectations.

The New Zealand Dollar posted a similar move, up early in the session in response to a potentially bullish technical chart pattern from the day before. However, the buying dried up, allowing investors to drive the market back to nearly unchanged.

The NZD/USD settled at .7231, up 0.0002 or +0.02%.

Last week, the Kiwi found support once again at a 50% level at .7195. This price and the 61.8% level at .7138 is holding up this market. Buyers are optimistic that the new Reserve Bank of New Zealand Chairman will somehow revive the economy.

In economic news, the week started with the New Zealand Trade Balance coming in better-than-expected at 217M. Traders were looking for a 100M decline. The previous month was revised lower to 655M.

The most important report for the week was ANZ Business Confidence. It came in at -20.0, worse than the previously reported -19.0.

Building Consents rose 5.7% versus the previously 0.0%.

Forecast

With Australia and New Zealand on a bank holiday on Monday, the trade is likely to be determined by trader response to a slew of U.S. economic reports including the ISM Manufacturing PMI. It is expected to come in at 60.1, down slightly from 60.8.