**AUD/USD and NZD/USD Bearish Ahead of RBNZ Decision; USD/CAD Sees Upward Momentum**
*Originally reported by ForexLive / Justin Bennett; this article expands on the original analysis with additional context and technical insights.*
The forex markets are experiencing increased volatility as investors focus on key central bank decisions and broader macroeconomic trends. Currency pairs involving the Australian, New Zealand, and Canadian dollars are particularly active as traders prepare for the Reserve Bank of New Zealand’s (RBNZ) upcoming interest rate decision and react to recent moves in commodity prices and global risk sentiment.
In particular, AUD/USD and NZD/USD are showing sustained bearish pressure, while USD/CAD is trending upward, driven by both U.S. dollar strength and commodity shifts. In this expanded analysis, we explore the current technical setups, fundamental drivers, and expected outcomes for these three key currency pairs.
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## AUD/USD Technical Outlook: Bearish Trend Continues
The Australian dollar continues to weaken against the U.S. dollar, trading at a multi-week low after dropping below key support levels. The recent price action suggests further downside risk, driven by bearish sentiment in the global risk environment and anticipation surrounding upcoming monetary policy decisions in the Asia-Pacific region.
**Key Technical Levels for AUD/USD:**
– Breakdown below 0.6580 confirms a bearish bias. This level held as key support in prior sessions and is now acting as resistance.
– Price is currently testing 0.6520. A clean break below this level opens the door to the next support zone at 0.6460.
– 0.6460 is the May 2024 low and would likely attract buying interest, but a breakdown could signal a more extended bearish move.
**Chart Patterns and Momentum Indicators:**
– The daily chart shows consistent lower highs and lower lows, confirming the bearish structure.
– The 20-period EMA has crossed below the 50-period EMA on the 4-hour chart, often seen as a sign of accelerating downside momentum.
– RSI on the daily is approaching oversold conditions but has not yet signaled a reversal, indicating more room for decline.
**Fundamental Drivers:**
– Australia’s economic outlook has deteriorated slightly amid slowing growth and softer inflation data. This strengthens the case for the Reserve Bank of Australia (RBA) to hold off on further tightening.
– Commodity prices, especially for iron ore and copper (key Australian exports), have flattened after an earlier rally, reducing support for the AUD.
– The U.S. dollar remains strong as investors expect the Federal Reserve to keep rates higher for longer, especially after solid recent U.S. inflation and labor market data.
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## NZD/USD Under Pressure Ahead of RBNZ Rate Decision
The New Zealand dollar is facing selling pressure ahead of the Reserve Bank of New Zealand’s (RBNZ) monetary policy announcement, scheduled for June 26th, 2024. While the central bank is widely expected to keep the OCR (Official Cash Rate) unchanged at 5.50 percent, markets are keenly watching for forward guidance on rate cuts or an extension of the current restrictive stance.
**NZD/USD Technical Developments:**
– The pair recently broke through support near 0.6120, flipping this range into new resistance.
– Strong intermediary support lies near 0.6050, with the next downside target emerging around the psychological handle of 0.6000.
– Fibonacci retracements from the April to May rally also point to a deeper retracement if momentum continues to favor the bears.
**Indicators and Market Sentiment:**
– MACD on the daily timeframe is showing a bearish crossover.
– RSI remains below 50, signaling persistent negative momentum without extreme oversold conditions yet.
– Institutional trader positioning in CFTC reports shows continued net short exposure in the kiwi, highlighting a fundamentally bearish outlook near-term.
**Key Considerations for the RBNZ Decision:**
– New Zealand’s Q1 202
Read more on USD/CAD trading.