- Late February has seen a resurgence on US Dollar strengthening as US Treasury yields move higher and with a growing anticipation of inflationary pressure and a possibly more hawkish FOMC.
- This has seen AUDUSD sell off through modest range supports and although the intermediate-term theme is for broader range, the asymmetrical threat is to the downside (the key level us .77 56).
- For the NZDUSD currency rate, the intermediate-term outlook remains bullish whilst above .7175, the immediate risks for late February are for a correction lower and possibly for a challenge to this level.
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A more significant setback on Wednesday-Thursday through supports at .7877 and .7801, to ease the positive tone from last week’s move to another new rebound high (and rally through key .7960 resistance), to keep a negative bias into Thursday.
The mid-February push above .7960 neutralised the intermediate-term bear view, to switch the outlook to an intermediate-term range theme (range seen as .7756 to .8046).
- We see a downside bias for .7794; break here aims for 7771, maybe towards key 7756, which we would look to try to hold.
- But above .7879 opens risk up to .7902, maybe .7951.
Intermediate-term Range Breakout Parameters: .7756 to .8046.
- Upside Risks: Above .8046 sets a bull trend to aim for .8136, 8295 and the .8452/76 area.
- Downside Risks: Below .7756 sees a bear trend shift to target .7635 and .7500.
Resistance and Support:
4 Hour AUDUSD Chart
Another dip lower Wednesday-Thursday, through our initial support level at .7343/41 and also .7323, easing the positive tone from last Friday’s push to match the cycle high from January at .7437, shifting the bias lower into Thursday.
The mid-February surge through .7420 produced a shift to an intermediate-term bull theme into at least the second half of February.
- We see a downside bias for .7305; break here aims for .7264 and maybe towards the .7238/30 area, which we would look to try to hold.
- But above .7351 opens risk up to .7386, which we would look to try to cap.
Intermediate-term Outlook – Upside Risks:
- Whilst above .7175, we see a positive tone with the bullish threat up to .7558 and .7744.
What Changes This? Below .7175 signals a neutral tone, quickly shifting negative below .7138.
Resistance and Support:
4 Hour NZDUSD Chart