- A significant US Dollar strengthening has been seen into latter April as US inflationary pressures continue to mount, driving US Treasuries to higher yields, with the notable break by the US 10yr Note above the 3% threshold.
- This US$ rally has allowed for some significant technical moves against Major G10 currencies, with the somewhat hesitant global “risk on” theme taking a back seat for now.
- The AUDUSD surrender of the .7649/40 area has shifted the intermediate-term outlook back to bearish, rejecting the earlier April recovery above .7785 that set a neutral theme, with risk skewed for further AUDUSD losses through .7500.
- For NZDUSD, the plunge lower from mid-April has not only dismissed the bullish tone from the previous push above key .7355 resistance, but the surrender of .7151 has established a Triple Top pattern, to sets the intermediate-term trend to bearish.
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AUDUSD Still a bear theme
A Friday bounce above the notable .7550/51 resistance area, but then a failure from just above here (from .7560), to hold onto bear forces from the significant sell off at start of May through the key swing low from late 2017 at .7500 (for a multi-month Double Top), to leave the bias lower again Monday.
The latter April surrender of key .7640 support set an intermediate-term bear trend again, reinforced by the surrender of .7500.
- We see a downside bias for .7490 and .7469/57; below targets .7418 and maybe .7400.
- But above .7561 quickly aims at the .7584/89 area.
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 trend intact
A Friday setback exactly from our initial resistance at .7052. sustaining bear pressures from the start of May plunge through .7035/31 and .7008 supports, PLUS from the latter April surrender of the key .7151 level, keeping risks Monday.
The latter April plunge through key .7151 signalled a large topping pattern (Triple Top) and shifted the intermediate-term outlook from bullish to bearish.
- We see a downside bias for .6983; below here targets .6951 and maybe closer to .6931.
- But above .7042 quickly opens risk up to .7052 , maybe .7095.
Intermediate-term Outlook – Downside Risks: We see a downside risk for .7070/69.
- Lower targets would be .6951 and .6778
- 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