AUDNZD has sold off in the past couple of days but the uptrend remains intact. Price is moving inside an ascending channel formation on its 4-hour time frame and is currently testing support at the 1.1000 major psychological level.
This coincides with a former resistance level that might hold as a floor from here. It also lines up with the 100 SMA, which is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. Stochastic is indicating oversold conditions, which means that sellers are exhausted and ready to let buyers take over.
There have been no major reports out of New Zealand, leaving traders to react to polls leading up to next week’s elections. The Kiwi enjoyed a boost from a poll indicating that the Green Party might not have enough votes to be represented in Parliament. This could ease some political uncertainty as it would leave the National Party to secure majority of the seats and avert a coalition government.
Meanwhile, Australia has its jobs report due later on this week and might report a 17.5K gain in hiring. This would be lower than the earlier 27.9K increase but still enough to keep the unemployment rate steady at 5.6%. Stronger than expected data could support hopes that the RBA could switch to a more hawkish bias in their next policy announcements.
China is also set to print a number of top-tier reports on Thursday, namely industrial production, retail sales, and fixed asset investment. A rebound in the first two figures is eyed but fixed asset investment could lag from 8.3% to 8.2%.
By Kate Curtis from Trader’s Way