AUD/NZD Pressured at Support as Sellers Eye Further Downside Ahead of Key Inflation Data
Market Overview
The Australian and New Zealand dollars held steady in Thursday’s session, underpinned by cautious optimism surrounding US-China trade relations. Hopes that tariff disputes might ease supported risk-sensitive currencies, though volatility in shorter timeframes remained elevated. The frequent shifts in White House trade policy, particularly President Trump’s comments that tariff reductions depend on China’s willingness to negotiate, have left markets in a reactive stance. In this environment, AUD/NZD continues to trade near recent ranges, oscillating with broader risk sentiment.
Technical Analysis
From a technical standpoint, AUD/NZD has embarked on a corrective bearish phase within the one-hour timeframe. Sellers have already breached the previous low at 1.06790 and are currently testing immediate support at 1.06736. A decisive break below this level could unlock further downside potential, with the next targets at 1.06668 and 1.06592, respectively. These levels mark significant junctures within the recent price structure and would confirm continued bearish momentum.
Momentum oscillators corroborate the weakening price action. The RSI has slipped into negative territory, confirming building selling pressure, while the MACD histogram remains below zero with deepening negative bars, underscoring the strength of the current downward movement. Furthermore, price remains below the short-term moving averages, adding weight to the bearish setup.
However, should buyers stage a recovery and reclaim ground above the immediate resistance at 1.06988, this would invalidate the bearish outlook and open a path toward higher resistance zones at 1.06866 and 1.06988.
Key Technical Levels
Resistances: 1.06790, 1.06866, 1.06988
Supports: 1.06736, 1.06668, 1.06592
Fundamental Drivers
While the economic calendar remains light for the Australian and New Zealand dollars for the remainder of the week, attention gradually shifts to next week’s Australian quarterly inflation report. This data will provide critical insights into whether the Reserve Bank of Australia (RBA) might adjust its interest rate policy at its May meeting. Given persistent market uncertainty around global growth and policy rates, this inflation figure could act as a key catalyst for the AUD/NZD pair.
In the interim, external factors such as trade headlines and global risk sentiment continue to drive intraday volatility. With markets sensitive to developments in US-China relations, any sudden shifts could quickly alter the near-term trajectory of both currencies.
Conclusion
AUD/NZD risks further declines toward 1.06668 and 1.06592 if sellers break support at 1.06736. A recovery above 1.06988 would negate the bearish setup.
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