AUDNZD Looks To Trade Higher

AUDNZD Looks To Trade Higher

Key Highlights            

  • Australian Dollar enjoyed decent gains against the New Zealand Dollar, and it looks set for a break higher.
  • There is a minor bearish trend line formed on the hourly chart of AUDNZD, which is acting as a resistance.
  • A break above the trend line resistance may take the pair towards the 1.0750 area.
  • Australian AIG Performance of Services Index released by the Australian Industry Group posted a minor decline from the last reading of 48.2 to 46.3 in December 2015.

AUDNZD Technical Analysis

The AUDNZD pair gained recently and traded above the 1.0700 handle. There is a bullish trend line formed on the hourly chart, which provided support to the pair along with the 100 and 200 hourly simple moving average.

AUDNZD

However, on the upside there is a bearish trend line, which is preventing gains. There was an attempt already to break it, but buyers failed.

The hourly RSI is above the 50 level, which is an encouraging sign. If the pair corrects lower from the current levels, then there are many support areas on the way down, including the 50% Fib retracement level of the last wave from the 1.0658 low to 1.0727 high

Australian AIG Performance of Services Index

Today, the Australian AIG Performance of Services Index, which presents business conditions in the Australian service sector was released by the Australian Industry Group during the Asian session. The market was not expecting any major decline from the last reading of 48.2 in December 2015. However, the outcome was disappointing, as the Australian AIG Performance of Services Index declined from 48.2 to 46.3.

AIG

The report stated that “this was the third consecutive month of contraction for the Australian PSI and its lowest result since November 2014. Although the Australian PSI was stable, on average, during 2015 (averaging 50.6 points over the year), it moved lower in the final quarter. This implies real household consumption growth was around 2.5% p.a. in the December quarter of 2015“.

Overall, the report failed to stall gains in the AUDNZD pair. However, the highlighted bearish trend line is acting as a barrier for buyers. If they manage to break it, then the pair may rise towards the 1.0750 level.



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