Key Levels in Asian Trade: AUD & NZD
Rowan Crosby • 2 min read
The volatility that has hit markets in recent times seems to be subsiding for the time being, but that’s not to say we are out of the woods just yet.
As talk grows that new cases of coronavirus are falling and the ‘curve is flattening’, hope remains that we will be back to business as usual. But it appears there is still a fair bit of water to go under the bridge just yet as the US has projected some ugly numbers.
For the moment, Asian pairs appear to be holding up OK, but looking at the technicals it does feel like there is some resistance at play.
Looking at the AUD/USD, we can see the steady uptrend that has been forming. However, that 0.6200 level has not broken as yet and after risk assets weakened overnight that could be a stopping point for us.
I am still looking at a move back to the recent swing low of 0.6000 as a real possibility and we can structure our trades around those levels for now.
This is a pattern that is traditionally bearish as well. These uptrends do break with a bang and the little relief rally might be short-lived. So I will be waiting for the next wave of selling to come in.
The NZD/USD is in a slightly more bearish position. As we can see on the chart, price is sitting just above key support at 0.5900, however, there has already been a failure at 0.6000.
The 0.5900 is also the swing low so a break of that level would likely lead to a sharp sell-off. That would see price fall to 0.5800 as the next support, followed by 0.5600 – which is nearing the bottom.
So there is room for an extended move lower if we get a break here, which is why the Kiwi will be worth watching today.