The AUDUSD and NZDUSD both pushed higher during the Asian session but have since reversed lower as U.S. Treasury yields trimmed earlier declines and U.S. equities slipped into negative territory. The S&P 500 is down 0.22% while the NASDAQ is lower by 0.48%. Meanwhile, the 2-year Treasury yield is down 1.9 basis points, after being lower by more than 3 basis points earlier in the day. The reversal in yields and risk sentiment has taken some of the wind out of the commodity currencies.
- AUDUSD:
The AUDUSD climbed back above both its 100-hour and 200-hour moving averages in the early Asian Pacific session, currently clustered near 0.6992, and reached a session high of 0.7011. However, the rally stalled at a key swing area and remained below last week’s highs between 0.7022 and 0.7026. The 0.7022 level also marks the 38.2% retracement of the decline from the May high to the late-June low, making the failure to test and break that resistance a technical disappointment for buyers. Since then, the pair has fallen back below both hourly moving averages, shifting the near-term bias back to the downside. The next support comes in between 0.6962 and 0.6978. A break below that zone would strengthen the bearish outlook and expose additional downside targets at 0.6928, 0.6912, and eventually the 200-day moving average near 0.6898. To regain control, buyers first need to reclaim and hold above the 100-hour and 200-hour moving averages. - NZDUSD:
The NZDUSD also moved higher early in the session but found willing sellers near the falling 100-hour moving average and the 50% midpoint of the decline from the late-May high to the June low at 0.5809. That confluence capped the rally almost perfectly, with the day’s high stalling at that resistance. The subsequent decline has brought the pair back toward a key swing area between 0.5765 and 0.5777, with today’s low reaching 0.5778, just above the top of that support zone. A move below 0.5765 would increase bearish momentum and target the two-week low at 0.5742, followed by the next swing support between 0.5719 and 0.5726. For buyers to regain confidence, the price would need to climb back above the falling 100-hour moving average, now at 0.5800, and hold above that level.
Buyers had their shot at the start of the day, but have now relinquished control to the sellers.
This article was written by Greg Michalowski at investinglive.com.