The AUD and NZD Can’t Keep Up with Stocks
Rowan Crosby • 1 min read
Despite another day where US stocks pushed to record high levels, the AUD and NZD couldn’t keep up the pace.
The main reason for that was the USD managed to regain some ground. The falling Greenback has been the story recently and for the time being, it has been finding a bit of support. It was kind of an interesting session, given that ADP employment badly missed the target of 1 million new jobs.
The AUD/USD in fact was the weakest of the majors yesterday and has really just tagged 0.7400 and fallen away from that point.
In truth, there is a lot of resistance around the 0.7400 and 0.7500 level and I think the Aussie will have a hard time breaking through.
The NZD/USD on the other hand help up a fair bit better than the Aussie.
It has certainly been the leader of the two pairs in recent times. The AUD downside wasn’t helped by a worse than expected GDP print, which showed the Aussie economy officially fell into recession territory. That means two negative quarters of economic growth.
While the economy might already be out the other side of it, as the RBA have noted, there is plenty of uncertainty still and I think we are seeing the Aussie correct a little on that data point and what it really means.
For the remainder of the Asian session, we will be watching both the AUD and NZD closely.
The AUD/USD bounced off 0.7300, but 0.7280 looks like a real level of interest and is the previous highs.
For the NZD/USD, 0.6750 is the big one. A fall below that level could mean a sharp drop. Alternatively, if price takes 0.6800, we could see another leg higher.