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Forex: AUD/NZD, 1.2060 support under threat

FXstreet.com (Barcelona) - The AUD/NZD exchange rate continues under pressure along Asian hours, with sellers snapping the price back towards the lower end of its 0.70 cents day range at 1.2060, as Australia again disappointed today with some bad number on the housing sector. This has led the market to further price in an RBA rate cut in May/June.

Since mid March this year, the pair has been developing an impressive bearish trend, one that has evaporated over 600 pips off the Australian Dollar value since the peak at 1.2660 on March 14.

The characteristics of the price activity could be classified as a steady non-volatile trend, except the swing from April 11 to 15, with the pair now established into a box with edges at 1.2060/1.2130, its second period of range-trading since the last impulsive downside resolution from April 16/24.

From an hourly perspective, the key area to break is 1.2050/60, where buyers continue to protect, although every time with more difficulties. Note, the multiple tests of support is probably starting to build a increasing number of stops below.

Besides, the last visit of 1.2660 just minutes ago has been welcomed with lack of enthusiasm, thus this weak bounce coupled with the 20ema starting to cap the upside on the hourly, all within the context of a downtrend, suggests risks are mounting over a possible attack towards 1.20 round number in the next sessions/days.

Session Recap: USD resumes the recovery; Soft local data disappoints

The USD has continued the initial recovery started after the FOMC taking EUR/USD to session lows at 1.3166, AUD/USD to 1.0240, GBP/USD to 1.5538, and NZD/USD to 0.8480, while USD/JPY to session highs at 97.40, and USD/CHF to 0.9282.
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The ECB Monetary Policy Meeting is just around the corner, and after being discussed for quite awhile now we will soon finally know the outcome of the meeting. Due to the lackluster economic data released around the globe over the last few weeks, some analysts believe we will not only see a rate cut by the ECB, but possibly additional measures to provide liquidity.
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