Australian Dollar Technical Forecast: AUD/USD, AUD/NZD Risks Reversal

AUD Analysis and Talking Points

  • AUD/USD | Risking a Reversal
  • AUD/NZD | Upside Limited, Risk-Reward Favours Pullback

AUD/USD | Risking a Reversal

The upside in AUD/USD has once again stalled ahead of trendline resistance and the 200DMA (0.6946). In turn, with bullish DMI’s edging lower, this raises the likelihood for a potential reversal in the pair with support at 0.6849 (100DMA) in focus. That said, given that we believe that we have seen the major low in the pair at 0.6668, dips in the pair are likely to be well supported as the mood music with regard to US-China trade wars improves.

AUD/USD Price Chart: Daily Time Frame (Nov 2018Nov 2019)

Australian Dollar Technical Forecast: AUD/USD, AUD/NZD Risks Reversal

AUD/NZD | Upside Limited, Risk-Reward Favours Pullback

AUD/NZD has continued to push higher, reaching a fresh 2019 peak of 1.0865. However, while momentum indicators are increasingly bullish, trend indicators (ADX) have yet to provide confirmation to the recent upside, which in turn may suggest that the upside move is somewhat exhausted. Therefore, further gains in the cross could be limited to 1.09. That said, the focus for the cross will be the RBNZ rate decision in which money markets are pricing in a 64% likelihood of a rate cut. Although, while risks are tilted towards a cut, following an uptick in the unemployment rate in the recent jobs report, as such, any upticks in the cross favours a pullback on a risk-reward basis.

AUD/NZD Price Chart: Daily Time Frame (Dec 17Nov 19)

Australian Dollar Technical Forecast: AUD/USD, AUD/NZD Risks Reversal

— Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

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