Technical Analyst, Saxo Bank
Summary: AUD pairs on the move either testing or breaking key levels
AUDUSD rejected at key resistance at 0.7122
AUDJPY possible Shoulder-Head-Shoulder pattern unfolding
GBPAUD possible double top pattern
AUDNZD strong uptrend eyeing 1.11
EURAUD can it break key support at 1.5265?
AUDUSD Resistance at around 0.7122 could be too strong for AUDUSD to break, at least at first attempt. Trend is up and RSI is bullish with no divergence indicating higher AUDUSD levels are likely i.e., a move to strong resistance at around 0.7265 is in the cards. If reached a correction should be expected.
If AUDUSD slides back below 0.6870 this bullish picture will be in jeopardy and a close below 0.6640 will reverse it.
Medium-term the key question is whether AUDUSD can close the week above its 200 weekly SMA. If it can and if AUDUSD breaks above resistance at 0.7122 the pair will face resistance at the falling trendline. A close above the falling trend line is likely to pave the way to resistance at 0.7265 and longer-term 0.7536.
IF AUDUSD closes the week at current level or higher RSI is above 60 threshold i.e., positive sentiment supporting the bullish scenario.
AUDJPY has once again bounced off support area around 88. The pair could caught in a range between 88 and 92.70 where 100 and 200 Moving Averages are providing resistance. AUDJPY needs to close above 93 to get upside traction towards resistance at around 95.40 and 98.40.
Indicators are currently indicating a weaker AUDJPY. RSI is still negative – it must close above 60 to reverse that – and 55, 100 and 200 Moving Averages are declining. AUDJPY could be range bound between 93 and 87 for quite some time.
Medium-term AUDJPY is drawing a complex Shoulder-Head-Shoulder like pattern (weekly chart) with potential down to 81-80. That very bearish picture will emerge if AUDJPY closes below the neckline which is the 1.618 projection of the distance between the Head peak and the neckline..
If AUDJPY manages to close above 91.85 a move to around 92.50 could be seen but for AUDJPY to reverse the bearish trend a close above 93.35 is needed
GBPAUD has formed a double top like pattern and a close below 1.7450 will confirm that picture with potential for a bearish move down to around 1.66-1.65.
At the time of writing where GBPAUD has broken the support RSI is below 40 i.e., in negative sentiment and Bollinger Bands are expanding thus supporting the bearish outlook.
To demolish this negative picture a close above 1.80 is needed.
EURAUD Current selling pressure seems likely to test key support at around 1.5265. If closing below the RSI will also close below its 40 threshold indicating further decline for EURAUD.
A sell-off down to the 200 daily SMA and the support at around 1.5065 could be seen.
If that scenario plays out ERUAUD is below its 55 weekly SMA.
EURAUD has failed to close above 200 weekly SMA on several occasions. On the weekly chart two possible scenarios have been drawn. First one (red arrow) EURAUD breaks below 1.5265 and below 55 SMA.
Second (blue arrows) is a bounce and correction from 1.5265 support followed by a sell-off down below 1.5265 the pair could be forming a Shoulder-Head-Shoulder like pattern.
RSI divergence explained: When instrument price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.