Technical Analyst, Saxo Bank
Summary: AUDUSD and NZDUSD forming sideways corrective patterns. Are they reversal or continuation patterns? AUDNZD bouncing in a rising wedge pattern. Will it continue or resume bearish trend?
AUDUSD seems to be forming and Ascending triangle corrective pattern. Resistance at around 0.69. RSI is showing positive sentiment indicating break out is likely to the upside with potential to 0.71
If AUDUSD instead breaks below the short-term rising trendline in the Ascending triangle key support is at around 0.6630. A close below could fuel a sell-off down to the 0.618 retracement at 0.6446.
NZDUSD seems to be forming a Descending triangle like pattern. If NZDUSD closes below 0.6155 a sell-off down to around 0.60 is likely. The divergence on RSI indicates that is the likely direction.
However, if NZSUSD manages to break the short-term upper falling trendline and closes above 0.6375 a move above December peak to 0.6635 - 0.6775 is in the cards.
AUDNZD is trading in a rising wedge like pattern testing 0.382 retracement of the September to December downtrend. There is still room up to strong resistance around 1.00 where both 100 and 200 daily SMA’s will provide resistance. RSI above 60 indicates furht4er short- term upside.
If AUDNZD breaks below its steep rising trendline the down trend could resume with support at around 1.06. If that level is taken out December trough is likely to be tested.
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.