It is a bearish start to the day for the Kiwi and the Aussie. Better-than-expected NZ business confidence failed to support as risk aversion resurfaced.
According to the September survey,
Lingering inflation sentiment likely muted the effect of improved business confidence on the Kiwi.
There were no stats to provide the Aussie Dollar with direction, leaving the AUD/USD pair in the hands of market risk sentiment.
At the time of writing, the Aussie was down 0.38% to $0.64969. The Aussie rose to a high of $0.65248 before falling to a low of $0.64958.
The AUD/USD needs to avoid the $0.6472 pivot to target the First Major Resistance Level (R1) at $0.6580. The Aussie would need a marked shift in risk sentiment to support a breakout from the Wednesday high of $0.65308.
In the case of a breakout session, the Aussie would likely test resistance at $0.66 and the Second Major Resistance Level (R2) at $0.6640. The Third Major Resistance Level (R3) sits at $0.6807.
A fall through the pivot would bring the First Major Support Level (S1) at $0.6413 into play. However, barring a market flight to safety, the AUD/USD pair would likely avoid sub-$0.6300. The Second Major Support Level (S2) at $0.6304 should limit the downside.
The Third Major Support Level (S3) sits at $0.6136.
Looking at the EMAs and the 4-hourly chart, the EMAs send a bearish signal. The AUD/USD sits below the 50-day EMA, currently at $0.65653. The 50-day EMA slipped back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.
An AUD/USD move through the 50-day EMA ($0.65653) would support a breakout from R1 ($0.6580) to target R2 ($0.6640). The 200-day EMA sits at $0.67440. However, failure to move through the 50-day EMA would leave the AUD/USD under pressure.
This morning, the Kiwi was down 0.40% to $0.57056. The Kiwi rose to a high of $0.57333 before falling to a low of $0.57032.
The NZD/USD needs to avoid the $0.5675 pivot to target the First Major Resistance Level (R1) at $0.5786. The Kiwi would need a marked shift in risk sentiment to support a breakout from the morning high of $0.57333.
In the case of a breakout session, the Kiwi would likely test the Second Major Resistance Level (R2) at $0.5844. The Third Major Resistance Level (R3) sits at $0.6012.
A fall through the pivot would bring the First Major Support Level (S1) at $0.5618 into play. However, barring a market flight to safety, the NZD/USD pair would likely avoid sub-$0.5500. The Second Major Support Level (S2) at $0.5507 should limit the downside.
The Third Major Support Level (S3) sits at $0.5338.
Looking at the EMAs and the 4-hourly chart, the EMAs send a bearish signal. The NZD/USD sits below the 50-day EMA, currently at $0.57830. The 50-day EMA fell back from the 100-day EMA, with the 100-day EMA sliding back from the 200-day EMA, delivering bearish signals.
An NZD/USD move through the 50-day EMA ($0.57830) and R1 ($0.5786) would support a run at R2 ($0.5844) to target the 100-day EMA ($0.58875). The 200-day EMA sits at $0.60054. However, failure to move through the 50-day EMA would leave the NZD/USD under pressure.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.