Key Levels for the AUD and NZD
Markets are pushing ever so higher this morning in Asia, but there still looks to be a fair bit of downside pressure on both the AUD and NZD.
There are some key levels above that will likely hold us down in the coming sessions.
There has been a bit of second tier-data filtering through as well today, but nothing market moving. But still the same sort of longer-term trends in the data are clearly present and somewhat concerning.
Job advertisements and business confidence in Australia remains low. This has been a trend in recent times and it is something the RBA has pointed out.
Lending conditions in Australia remain tight, particularly for small business and even many property investors. This is still weighing on confidence to some degree.
At the same time Chinese Services PMI has slightly missed expectations but hasn’t move markets all that much.
As such, the AUD/USD is still under pressure. We have seen the 0.6700 level hold up strongly. The recent push above the 0.6750 mark also held up for now, albeit after a test.
An interesting short opportunity, might be on another push higher and a lower high. When it then breaks back down under the most recent low, that would look to me like a higher probability short into the 0.6700 level.
The NZD/USD on the other hand is sitting right under key resistance at 0.6300.
We’ve seen price attempt to push higher and not be able to crack 0.6350. Another attempt to push higher and fail would be another good area to look for a short. You could then attempt to add on a hold below 0.6300.
These round number levels have proven valuable in both the AUD and NZD and should give us more opportunities going forward for trades with good risk/reward.
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