Aussie hoping for a boost after declining steadily. What more does the 26 February AUDNZD Technical Outlook reveal about how the pair trades currently?
26 February, GKFX – AUD/NZD is dropping to kick off the Tokyo session, trading back into 1.0750 after climbing at the week open.
The Aussie and the Kiwi have both fallen to the bottom of the barrel in global markets, as the Antipodean economies lag behind global growth trends, forcing both the Reserve Bank of Australia and the Reserve Bank of New Zealand into a holding pattern, both central banks awaiting signs of increasing economic growth from their respective economies while the rest of the world prepares to batten down the hatches and start lifting key interest rates.
A data-light week will see market sentiment dictate direction
This week sees limited mid-tier data releases for either currency, with NZD Trade Balance at 21:45 GMT today and AUD New Homes Sales sometime on Tuesday likely to set the tone for the week ahead.
With both the AUD and the NZD suffering across the board, February saw the Aussie as the bigger loser, as the currency’s intrinsic correlation to gold and bond yields sent buyers running in the face of US Treasuries at multi-year highs and Gold taking a breather following a protracted run up the charts in December. The recent rebound in yields gave the Aussie just enough lead to make back some ground against the Kiwi but still remains steeply off 2017’s high of 1.1290.
26 February AUDNZD Technical Outlook
The pair is still trading beneath the 200-day SMA, and the 34 EMA has crossed beneath the major indicator, and both MAs are now providing hard resistance from 1.0825. H4 candles show the pair breaking above a recent declining trendline, and the next challenge for buyers will be to capture the 1.080 area decisively to provide a leg up into higher figures. Intraday support comes from 1.0717 and 1.0654, with resistance at 1.0840 and 1.0894.
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