The AUDUSD and NZDUSD traded lower today on general dollar strength. Tonight, the NAB business confidence level will be reported which could give both pairs something to trade off of in the non-data rich trading day. The next two days will be big for the kiwi. The Reserve Bank of New Zealand (RBNZ) governor Graeme Wheeler will speak, and the central bank will release their financial stability report. Wednesday, the New Zealand quarterly retail sales will be issued.
NZDUSD has been down over the last couple sessions, and the daily chart looks to be forming a head and shoulders pattern. Price action is currently hovering over the neckline, but this subjective pattern is not confirmed until the neckline is broken and price action closes below .8213. The 50 percent Fibonacci retracement may provide a stop below, but this week’s NZD data may provide the momentum going forward. The ADX momentum is weak, and the -DMI is tracking downward. Look for a bounce back to .8250-70 if a pullback presence itself.
The Australian dollar is trading lower against the greenback. The daily chart is showing a declining channel within price action hanging at the midpoint. A demand zone is located at .9300 to .9280, at the lower end of the channel. AUDUSD does not have a lot of Australian-specific data to trade to, but tomorrow’s Westpac consumer sentiment may provide the next leg down. October’s consumer sentiment fell to negative 2.1 percent from September’s 4.7 percent.
If the demand zone is broken, .92 is the next logical point of support. Topside potential is at .9360-75.
AUDNZD broke an ascending channel to the downside, but price action is consolidating at 1.3120. Upside could be locked at the 20 and 50 EMA just below 1.14, while downside could break lower to 1.12. Positive NZD data should push AUDNZD lower, while negative data from the RBNZ could push AUDNZD higher to 1.14.