Key Technical Levels in Asian Trade

There isn’t much news flow today in Asian trade, so this is a good opportunity to look at the key technical levels of the major Asian pairs.

Over the last 24-48 hours, we’ve seen a fair bit of weakness in both the AUD/USD and NZD/USD.

For me it is a bit of buy the rumour sell the fact after the trade deal. While we also heard a relatively dovish looking update from the RBA minutes yesterday, that were pointing to a high probability of another rate cut in February when the board next meet.

So for the time being there is a bit of a short bias in the air in Asian trade.

AUD/USD Levels

For me, the 0.6900 level was a really big one for the Aussie. At the time, I suggested that it would be the ideal spot to find a short on a bounce and sure enough, that’s what it appears happened.

Since that point price has broken down though 0.6865, which was the breakout level I wrote about yesterday and as we speak, price has settled around 0.6850.

While we might be biased to the short side, I am not ruling out a bounce here. Given the fact that price is being sucked towards these round number level and halves, I think this makes for a good opportunity.

Depending on which side wins the battle or 0.6850, will dictate our short-term bias and should provide a good profit target of 0.6900 or 0.6800.

There is big resistance at 0.6900 including the longer-term 200 SMA so I doubt we’ll see price push through that level any time soon.

NZD/USD Levels

For the Kiwi, it looks like 0.6600 has held up so far and there is selling coming in here. The next target for me is the half at 0.6550.

However, that has not really been a significant level in reality.

I really think we could see a sell-off here, all the way down to 0.6520. Which has been both support and resistance in the patch and I would think price will get sucked into this area.

Shorting a bounce under 0.6600 also wouldn’t be a bad play.

That said, we are in a longer-term uptrend at the moment, so these plays are only scalps.