# Aussie and Kiwi Dollars Start Christmas Week with Gains: AUD/USD and NZD/USD Outlook
*Original reporting by Kenny Fisher at MarketPulse.*
## Overview
As the final week leading up to Christmas begins, the foreign exchange (FX) market is experiencing calm yet notable activity. The Australian Dollar (AUD) and New Zealand Dollar (NZD) emerged as standouts, recording gains that signified positive momentum at the start of the holiday period. The overall FX landscape saw limited volatility as markets prepared to enter a period characterized by lighter volumes, but the moves in AUD and NZD point toward underlying economic drivers and shifting market sentiment.
This article examines the recent performance of the Aussie and Kiwi dollars, explores the catalysts behind their strength, delves into the technical outlook for AUD/USD and NZD/USD, and provides a broader context using supplementary market analysis from sources like Reuters, Bloomberg, and forex platforms. All insights and references to the original coverage by Kenny Fisher and MarketPulse are duly credited.
## FX Market Conditions: End-of-Year Dynamics
### Holiday Season Activity
– The week before Christmas is traditionally characterized by subdued FX trading.
– With many market participants taking leave, volumes thin and liquidity decreases.
– Reduced activity often leads to more pronounced price swings, as smaller trades can move markets more than usual.
### General Risk Sentiment
– Broader risk-on sentiment was observed, as global equities maintained supportive conditions.
– The US dollar saw mild downward pressure amid cautious optimism about 2024 economic prospects and potential Federal Reserve policy shifts.
– Diminished geopolitical risks and positive economic data facilitated a slight preference for higher-yielding currencies like the AUD and NZD.
## AUD/USD and NZD/USD: Recent Performance
### The Australian Dollar: AUD/USD
– At the start of Christmas week, the Australian Dollar gained ground, trading at around 0.6750 against the US dollar.
– The pair approached levels last seen during earlier 2023 rallies, surpassing its 200-day moving average and confirming the pair’s break from medium-term consolidation.
– Positive economic signals in Australia and anticipation of steady monetary policy supported the AUD.
#### Catalysts for AUD Strength
– **Australian Employment Report:** Better-than-forecast jobs data boosted confidence. Unemployment remained steady, and job addition figures exceeded expectations.
– **RBA Monetary Policy Stance:** The Reserve Bank of Australia (RBA) has maintained a neutral to mildly hawkish tone, emphasizing vigilance over inflation and leaving the door open for further policy tightening if required.
– **China Recovery Hopes:** Australia’s economy is closely linked to China’s outlook, as China is a primary destination for Australian exports (notably iron ore). Signs of stability or improvement in Chinese economic data tend to buoy the AUD.
#### Technical Analysis for AUD/USD
– Breaking above the 0.6700 resistance level was significant, triggering bullish momentum.
– The next technical resistance is in the 0.6835–0.6850
Read more on AUD/USD trading.