AUDNZD could be in for a selloff since the pair formed a double top on its 1-hour time frame. Price found resistance at the 1.1300 major psychological level and is testing the neckline at the 1.1100-1.1150 area.
A break below the neckline could confirm the potential selloff, which might last by around 200 pips or the same size as the chart formation. If the neckline holds as support, a bounce back to 1.1300 might be in the cards.
Stochastic is still moving up but is almost in the overbought zone, hinting that buyers are in control but that upside momentum might weaken later on. On the other hand, RSI is moving up from the oversold area, which suggests that buying pressure is still building up.
AUDNZD Fundamental Factors
In terms of fundamentals, the Aussie could be a stronger bet compared to the Kiwi since the RBA suggested that they’re done cutting interest rates while the RBNZ could be open to further easing. However, the recent dairy auction in New Zealand yielded a 14.8% increase in dairy prices while the quarterly PPI figures showed that the declines in producer prices weren’t as sharp as expected.
The 100 SMA is above the longer-term 200 SMA, suggesting that the path of least resistance is still to the upside. Gold prices might affect Aussie movements, however, and the falls in the precious metal have recently yielded losses for the currency.
No other event risks are lined up from both Australia and New Zealand in the coming days, which suggests that technicals might come into play for now. Aside from that, announcements from China could also have an impact on Aussie price action since it is Australia’s largest trade partner. Last week’s yuan devaluations led to losses for the Australian dollar since the move would make imports more expensive in the Chinese market.
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