AUD/USD and NZD/USD Fundamental Analysis: US CPI in Focus

It is a quiet Monday session for the AUD/USD and NZD/USD. There are no economic indicators from Australia or New Zealand to consider this morning.

The lack of economic indicators will leave the pairings in the hands of market risk sentiment. Uncertainty surrounding the all-important US CPI Report on Tuesday and the Fed interest rate decision on Wednesday will test buyer appetite.

Eying the US session, there are no US economic indicators to shift the mood. With three days remaining, the probability of a 25-basis point Fed interest rate hike stood at 28.8%, up from 25.3% one week earlier. However, the sentiment toward the July interest rate decision has turned more hawkish.

According to the CME FedWatch Tool, the chance of a 25-basis point July Fed rate hike stands at 53.0% versus 30.6% for a hold. Significantly, bets on a 50-basis point July interest rate hike rose from 14.4% to 16.4% over the last week.

AUD/USD Price Action

This morning, the AUD/USD was down 0.02% to $0.67417. A mixed start to the day saw the AUD/USD fall to an early low of $0.67330 before rising to a high of $0.67424.

Technical Indicators

Resistance & Support Levels

The AUD/USD needs to avoid the $0.6729 pivot to target the First Major Resistance Level (R1) at $0.6765. A move through the Friday high of $0.67506 would signal a breakout session.

In case of a breakout session, the Aussie would likely test the Second Major Resistance Level (R2) at $0.6787. The Third Major Resistance Level (R3) sits at $0.6845.

A fall through the pivot would bring the First Major Support Level (S1) at $0.6707 into play. However, barring a risk-off-fueled sell-off, the AUD/USD pair should avoid the Second Major Support Level (S2) at $0.6671.

The Third Major Support Level (S3) sits at $0.6613.

Looking at the EMAs and the 4-hourly chart, the EMAs sent bullish signals. The AUD/USD sat above the 50-day EMA, currently at $0.66501. The 50-day EMA pulled away from the 200-day EMA, with the 100-day EMA narrowing on the 200-day EMA, delivering bullish signals.

A hold above the Major Support Levels and the 50-day EMA ($0.66501) would support a breakout from R1 ($0.6765) to give the bulls a run at R2 ($0.6787). However, a fall through S1 ($0.6707) would bring S2 ($0.6671) and the 50-day ($0.66501) into view. An AUD/USD fall through the 50-day EMA would send a bearish signal.

NZD/USD Price Action

This morning, the NZD/USD was down 0.01% to $0.61277. A mixed start to the day saw the NZD fall to a low of $0.61165 before rising to a high of $0.61281.

Technical Indicators

Resistance & Support Levels

The NZD/USD has to avoid the $0.6117 pivot to target the First Major Resistance Level (R1) at $0.6150. A move through the Friday high of $0.61390 would signal a bullish session.

In the case of a breakout session, the Kiwi would likely test the Second Major Resistance Level (R2) at $0.6172. The Third Major Resistance Level (R3) sits at $0.6226.

A fall through the pivot would bring the First Major Support Level (S1) at $0.6096 into play. However, barring a risk-off-fueled sell-off, the NZD/USD should steer clear of the Second Major Support Level (S2) at $0.6063.

The Third Major Support Level (S3) sits at $0.6009.

Looking at the EMAs and the 4-hourly chart, the EMAs sent bullish signals. The NZD/USD sat above the 100-day EMA, currently at $0.61094. The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.

An NZD/USD breakout from the 200-day EMA ($0.61491) and R1 ($0.6150) would give the bulls a run at R2 ($0.6172). However, a fall through the 100-day EMA ($0.61094) and S1 ($0.6096) would bring the 50-day EMA ($0.60830) into view. A fall through the 50-day EMA would send a bearish signal.