**AUDUSD and NZDUSD Face Further Downside Risks: An In-Depth Technical Overview**
_Original author: Steve Miley, ForexTraders.com_
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The foreign exchange market continues to reflect shifting global economic fundamentals, and the AUDUSD and NZDUSD currency pairs are particularly noteworthy as both appear increasingly vulnerable to further declines. This analysis takes an in-depth look at the technical setup and fundamental drivers shaping the current and future direction for the Australian dollar (AUD) and New Zealand dollar (NZD) against the US dollar (USD), drawing on the insights of Steve Miley from ForexTraders.com and integrating additional perspectives from recent market reports and economic data.
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## Overview: Persistent Downside Momentum for AUDUSD and NZDUSD
Both the Australian and New Zealand dollars have experienced notable selling pressure in recent weeks against the US dollar, anchored by concerns over slowing economic activity in the Asia-Pacific region and the continuously hawkish tone adopted by the US Federal Reserve. Risk-off sentiment in global markets and commodity price volatility have further compounded downside risks for the so-called Antipodean currencies.
### Key Drivers Behind the Bearish Outlook
The following factors are pivotal in understanding the recent decline and ongoing weakness in AUDUSD and NZDUSD:
– **U.S. Dollar Strength:** The US dollar remains robust due to persistent expectations of higher-for-longer interest rates from the Federal Reserve.
– **Commodity Market Weakness:** Both the AUD and NZD are heavily correlated with commodity exports. Soft demand, particularly from China, has undercut these export-based economies.
– **Global Risk Sentiment:** Investors are favoring safe-haven assets amid market volatility, leading to capital outflows from riskier currencies.
– **Diverging Central Bank Policies:** The Reserve Bank of Australia (RBA) and the Reserve Bank of New Zealand (RBNZ) have signaled cautious approaches compared to the Fed’s hawkishness, narrowing interest rate differentials.
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## Recent Price Action and Technical Analysis
### AUDUSD Technical Picture
As highlighted by Steve Miley, the AUDUSD pair has consistently failed to mount meaningful recoveries, instead forming a series of lower highs and lower lows indicative of a bearish trend. Recent technical movements include:
– Breaking below earlier support levels, with the pair comfortably trading below the psychologically important 0.6600 mark.
– A push toward the 0.6500 zone, spotlighting short-term vulnerability.
– Prolonged inability to surpass resistance areas, such as the 0.6700–0.6750 band, which has historically constrained rebounds.
**Key Technical Levels for AUDUSD:**
– **Resistance:**
– 0.6610 (short-term resistance)
– 0.6640 (minor barrier)
– 0.6710/20 (major resistance zone from late May highs)
– **Support:**
– 0.6500 (immediate)
– 0.6470 (recent
Read more on AUD/USD trading.