The Australian dollar s trying to find a bottom near .9060 before trade back above .9100. Technically, and fundamentally, the Australian dollar is still weak.
Last week’s data was mixed. HIA new home sales MoM came in at -3.8 percent versus the previous reading of 6.8 percent. Private sector credit remained stable at .3 percent, matching the previous month’s reading but below the .4 percent expectations. On the upside, construction done QoQ increased to 2.7 percent opposed to the .1 percent in the previous release; yet, the monthly new home sales should cancelled any positive construction completed if home demand declines. Private capital expenditure QoQ did increase 3.6 percent, while last month’s four percent was revised down to 1.6 percent.
Technically, AUDUSD remains in the yearly downtrend, as well as the most recent decent from .9757. The first line of resistance will be .9150 with additional resistance at .9210.
If support is broken at .9058, AUDUSD will find its way to .8970. However, the Chinese manufacturing purchasing manager’s index came in at 51.4, matching the previous month yet beating forecasts of 51.2. Expect AUDUSD to gain a little traction from “success by association.”
The kiwi has remained range bound and is more volatile that the Australian dollar. The NZDUSD has been on a downtrend, trading lower after a confirmed break of a head and shoulders pattern. New Zealand posted better than expected data last week with business confidence jumping to 60.5 from 53.2. The trade balance printed a deficit, still, but it has the best print in recent years at -168 million; and it the best October print since the mid-90s.
Look for upward movement in NZDUSD to be capped. The 200 EMA will act as dynamic resistance at .8172, and the yearly high-to-low 50 percent Fibonacci retracement is just a few pips higher.
NZDUSD, still trending down, can find support at .8063, or the 61.8 percent Fib. level.