Primarily a consequence of US dollar strength over the past 1 to 2 weeks from late September into early October, but both the New Zealand and Australian dollars have boasting significantly negative signals versus the US currency.
In particular, the NZDUSD breakdown below .7084 has reinforced the previous Head and Shoulders topping pattern, for a more bearish theme further into October.
Although AUDUSD is simply negative within a broader range environment, risk is growing for a more bearish shift, but that still requires a break below support at .7403.
A setback from modest resistance on Wednesday at .7103 (back from .7095, to prod still lower and maintain negative pressures from the intermediate-term bearish shift, previously signalled this week below .7084.
This also leaves the threat for further losses into the FOMC Minutes release on Wednesday and on into Thursday.
- We see a downside bias for .7008/01; break here aims for key .6948.
- But above .7095/7103 opens risk up to .7139.
Short/ Intermediate-term Outlook – Downside Risks:
- We see a negative tone with the bearish threat to .6948.
- Below here targets .6800 and .6676/64.
Daily NZDUSD Chart
Another modest rebound effort Wednesday, to just prod above resistance at .7572, but to fail notably ahead of .7628 (from .7592) to maintain negative pressures from the October sell-off into the FOMC Minutes release Wednesday and on into Thursday.
- We see a downside bias for .7529/25; break here aims for .7500 and .7470.
- But above .7592 opens risk up to .7628.
The early September plunge below the .7489/86/84 support area produced a shift in the intermediate-term view from bullish to neutral.
Short/ Intermediate-term Range Parameters: We see the range defined by .7403 and .7760.
Range Breakout Challenge
- Upside: Above .7760 aims higher for .7835/50/78, .8000 and .8164/66.
- Downside: Below .7403 sees risk lower for .7284 and .7141.
Daily AUDUSD Chart