AUD/USD and NZD/USD Struggle as Market Jitters Shake Risk Sentiment

AUD/USD Technical Outlook

The Australian Dollar has encountered headwinds, failing to maintain its position above 0.7000 against the US Dollar. The currency pair experienced a fresh downturn after an unsuccessful attempt to surpass 0.7100. Currently, a discernible bearish trend line is taking shape on the hourly chart, presenting resistance around the 0.7020 mark.

A technical examination reveals that the AUD/USD pair struggled to overcome the 0.7150 barrier. Subsequently, a decline ensued, breaching the 0.7050 level. The pair then settled below 0.7000, also falling under the 50-hour simple moving average, before briefly touching a low of 0.6956. The pair is now consolidating. An initial recovery wave saw the price action move slightly above the 23.6% Fibonacci retracement level from the 0.7089 swing high to the 0.6956 low.

Immediate resistance is anticipated near the 50-hour simple moving average and the 50% Fibonacci retracement level, both converging around 0.7020, further reinforced by the presence of the aforementioned bearish trend line. A break above this level could see the pair test 0.7060, with a significant selling point around 0.7090. Surpassing this could propel the price towards 0.7140, and potentially 0.7200. A sustained close above 0.7200 might signal a more substantial upward trajectory, with the next key resistance emerging around 0.7280.

Conversely, initial support lies near 0.6975, followed by 0.6955. A breach below 0.6955 could trigger a further decline, targeting 0.6920 and potentially extending towards 0.6900.

NZD/USD Technical Synopsis

The New Zealand Dollar is exhibiting similar weakness, declining from the 0.6000 area. The currency gained downside momentum, trading below 0.5950 against the US Dollar. A key bearish trend line is also forming at 0.5900.

The NZD/USD pair has established itself below 0.5900 and the 50-hour simple moving average. It tested the 0.5850 level and is now consolidating losses. A modest recovery occurred, surpassing the 23.6% Fibonacci retracement level of the decline from the 0.5948 swing high to the 0.5848 low.

Should the pair attempt a recovery, it will encounter resistance around 0.5900, coinciding with the key bearish trend line. A more substantial barrier exists at 0.5910, aligning with the 61.8% Fibonacci retracement level. A successful move above 0.5910 could pave the way for a rise towards 0.5950, potentially opening the door for further gains towards 0.6010 in the near future.

On the downside, immediate support is located at 0.5850. A subsequent target for sellers is positioned at 0.5835. A break below this level could precipitate a further decline towards 0.5800, with the primary bearish objective residing around 0.5740.

Broader Market Context

The risk-off sentiment impacting both the AUD/USD and NZD/USD pairs is largely attributed to concerns surrounding global economic growth and persistent inflationary pressures. Recent economic data from major economies has painted a mixed picture, fueling uncertainty among investors. Furthermore, hawkish signals from central banks, indicating a commitment to further interest rate hikes to combat inflation, have added to the cautious mood. These factors collectively contribute to the downward pressure on risk-sensitive currencies like the Aussie and Kiwi dollars.