Technical Analyst, Saxo Bank
Summary: AUDUSD looking at resistance at 0.7152
EURAUD range bound and needs to break out for direction
AUDJPY under pressure close to test 87.30 support. Shoulder-Head-Shoulder pattern could unfold
AUDNZD forming rising wedge approaching 1.10 resistance
AUDUSD has continue higher after moving above its 200 daily SMA and seems to be forming a wedge like pattern.
AUDUSD pair seems to be set for a move to key resistance at around 0.7125.
But that resistance could be a hard nut to crack. Medium-term falling trendline (see weekly chart) will provide resistance and 200 and 100 weekly SMA’s are adding to that resistance. If rejected AUDUSD could slide back to test the lower rising trend line in the possible wedge. If closing below the lower rising trendline a move to test key support at around 0.6630 could be seen
EURAUD seems to be in a bit of a limbo jumping around its 55 daily SMA. A close above 1.5620 is required for a move back towards December peak just below 1.60 whereas a close below 1.5415 would see EURAUD to test key support at around 1.5265. If EURAUD closes below that level another sell-off down to around 1.50 i.e., dipping below the 200 SMA.
AUDNZD is trading in a rising wedge/channel like pattern approaching 0.50 retracement of the September- November downtrend and the strong resistance at around 1.10. The 100 SMA will provide some resistance too.
RSI is above 60 i.e., showing positive sentiment with no divergence supporting the bullish move. However, if sellers manage to push the pair below the lower rising trendline the key support at around 1.0785 could be tested. A close below that level is likely to reverse the uptrend in AUDNZD.
An uptrend that can potentially take the pair to the 0.618 retracement around 1.1095.
RSI divergence: 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.