Despite AUD’s recent rise against the USD since 19 Mar (+19% since), the major trend for AUD/USD is still to the downside as shown above. The recent pullback is approaching a key resistance level at $0.6670. The next resistance level above would be $0.7000, though it is unlikely to be reached. AUD/USD seems to be struggling to stay above the $0.6500 handle, and there seems to be a possible double-top forming over the past couple weeks, indicating a potential thinning out of Aussie bulls.

On the macro front, AUD has come under pressure recently following growing tensions between Australia and China, as the latter recently suspended imports of meat from Australia, allegedly in retaliation after Australia called for an independent probe into the origins of the coronavirus.

We would expect AUD/USD to trade sideways over the near term, with a range of 0.62-0.66. Over a longer horizon, the downward trend should continue, and revisit of 0.60 is likely while a retest of the 0.55 March low is possible as well.

Supports: 0.6200, 0.5500
Resistances: 0.6670, 0.6000, 0.5500



We see a similar looking chart for NZD/USD, with pair the rebounding about 12% since Mar 19. Like the AUD, the longer term trend for NZD is lower. Near-term upside for NZD/USD is likely to be capped at the 0.62 resistance level – a strong one as it previously acted as a support before breaking in early March.

The RBNZ this week expanded its QE program and said negative policy rates may be on the horizon. NZD/USD sliding back down to 0.55 is a likely scenario. The pair could even test 0.50 by year-end, a level last traded at more than 10 years ago during the GFC.

Supports: 0.5900, 0.5500
Resistances: 0.6200, 0.6500



AUD/NZD has largely been in a sideways range over the past 4+ years, bouncing between 1.13 and 1.02 throughout except during the last 2 weeks of March this year. Given RBNZ’s more dovish take earlier today, AUD/NZD is likely to test the support of 1.0850 soon.

Supports: 1.0600, 1.0250
Resistances: 1.0850, 1.100


Sources: All images from Bloomberg
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