AUD/USD, NZD/USD, USD/CNY – U.S. Dollar Broadly Lower

The U.S dollar lost ground in the Asian session, as the Australian, New Zealand and Chinese currencies have all posted gains. With the U.S. releasing Services PMI at 15:00 GMT, so we could see some volatility in the North American session.
Kenny Fisher

AUD/USD

AUD/USD has posted gains in Tuesday trade, erasing the losses seen on Monday. In the European session, the pair is trading at 0.6904, up 0.24% on the day.

Retail Sales Slip

Australian retail sales slowed to 0.2% in September, down from 0.4% a month earlier. Analysts had expected another respectable gain of 0.4%. Recent tax cuts and lower interest rates have failed to coax the Australian consumer to open her purse strings, and this could weigh on the economy and the Australian dollar.

AUD/USD Technical Analysis

AUD/USD continues to test resistance at 0.6920 but is clearly having difficulty breaking above this line. Above, we find resistance at 0.6960. Below, support at 0.6880 remains vulnerable. The 50-EMA, which is at 0.6827, continues to provide support.

AUDUSD 1-Day Chart

USD/CNY

USD/CNY continues to lose ground, as the Chinese yuan is flexing some muscle. In Tuesday’s European session, the pair is trading at 7.0041, down 0.38% on the day.

Caixin Services PMI Misses Forecast

The Caixin Services PMI dipped lower in October, dropping to 51.1 points. This missed the estimate of 51.5 and points to stagnation in the services sector. It marked the index’s lowest level in eight months. The weak reading underscores the negative impact that the trade war with the U.S. continues to have on the Chinese economy.

USD/CNY Technical Analysis

USD/CNY has extended the current downtrend and has broken through the symbolic line of 7.000 on Tuesday. This is the first time that has occurred since early August. The pair has room to move lower, with no support levels until 6.9930. The 50-EMA is showing resistance at 7.0701. I would expect the yuan to continue moving lower this week, so short-sellers may find this to be an opportune time to take advantage of the strengthening yuan.

USD/CNY 1-Day Chart

NZD/USD

NZD/USD has posted slight gains in Tuesday trade. In the European session, the pair is trading at 0.6416, up 0.22% on the day.

Ahead – NZ Braces for Weak Job Data

Later on Tuesday, New Zealand releases employment numbers for the third quarter. Employment change is projected to post a gain of just 0.2%, after a strong gain of 0.8% in Q2. The unemployment rate is forecast to rise to 4.1%, up from 3.9%. If the indicators fail to beat these estimates, we could see NZD/USD head lower. There was positive news on the export front, as ANZ Commodities rose 1.2% in October, its highest gain since March.

NZD/USD Technical Analysis

NZD/USD tested resistance at 0.6420 on Monday, but the move was short-lived as the pair retreated. This line remains under pressure and could be tested again on Tuesday.  Above, there is resistance at 0.6490, protecting the symbolic round number of 0.6500. On the downside, there is support at 0.6360. Just above this line, we have the 50-EMA, at 0.6372. The pair broke above this line on October 31 and the line remains in a support role, indicative of an uptrend.

NZD/USD 1-Day Chart

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