- In our last report we looked at the intermediate-term shift to bearish trends for both the AUDUSD and NZDUSD spot currency rates. These bear themes have been reinforced by subsequent negative price action.
- The US Dollar has seen a slight negative correction into mid-May, but the overall strengthening theme that has been seen from mid-April remains intact from ongoing US inflationary pressures and US Treasuries selling off to higher yields.
- For AUDUSD the April surrender of the key .7640 support level set an intermediate-term bear trend, reinforced by the break below of .7500.
- The latter April NZDUSD plunge through the key .7151 support signalled a large Triple Top pattern, shifting the intermediate-term outlook from bullish to bearish, and successive losses have reinforced this bear theme.
AUDUSD Bear theme intact, despite bounce
A bounce Wednesday to prod above initial resistance at .7510, but whilst capped by the .7538 level we still see bear pressures from Tuesday’s plunge lower (through supports at 7526 and .7452), to aim lower again Thursday.
The latter April surrender of key .7640 support set an intermediate-term bear trend again, reinforced by the surrender of .7500.
- Whilst below ,7538 we see downside bias for .7474 and .7446; break here aims for the .7410/00 area.
- Above .7548 aims for .7566, maybe to the .7584/89.
Intermediate-term Outlook – Downside Risks: We see a downside risk for .7368/31.
- Lower targets would be .7155/41 and .7000.
- What Changes This? Above .7813 shifts the outlook back to neutral; above .7916 is needed for a bull theme.
Resistance and Support:
4 Hour AUDUSD Chart
NZDUSD Bear theme resuming
A Wednesday rebound through the .6900/00 resistance area, but whilst still contained below .6925 we see bear pressures from Monday’s roll lower and the Tuesday selloff to a new bear move low, keeping risks lower Thursday.
The latter April plunge through key .7151 signalled a large topping pattern (Triple Top) and shifted the intermediate-term outlook from bullish to bearish.
- Whilst below .6925 we see a downside bias for .6868 and .6852; below here targets the .6818/15 area and maybe towards key .6781.
- But above .6925 targets .6987 and .6999.
Intermediate-term Outlook – Downside Risks: We see a downside risk for .6778.
- Lower targets would be .6676/64 and .6343.
- What Changes This? Above .7206 shifts the outlook back to neutral; above .7395 is needed for a bull theme.
Resistance and Support:
4 Hour NZDUSD Chart