AUD/USD: The Aussie continues to strengthen against the Greenback and is now retesting short term resistance at .9343. The Aussie completed the top portion of a double top (as depicted on the Chart by the 2 white boxes) last week but is on the verge of a breakout.
The AUD has been holding support along the 40 SMA since mid March. The 40 SMA is currently sitting at .9045. A break below support in addition to a close below the previous “higher low” (indicated by the red circle) would be a signal to open a Short AUD position.
For the moment we favor a Long AUD position. You can see the formation of an ascending triangle (dotted white lines) with the 40 SMA acting as the slope of the triangle. Anticipated continued weakness in the USD, the AUD's close tie to commodities, the strength of the Australian economy, the carry trade, and the strong trend on the Chart certainly point towards continued AUD strength. We are looking to take some profit at .95 and a further position reduction at .98
NZD/USD:
There are quite a few technical notes on the Kiwi's most recent price action. Firstly, similar to nearly all the other G-7's versus the Dollar the NZD has been trending long and hard. However, back at the end of October it looked like the trend was about to break. The Kiwi hit .76 and started to fall as indicated by the 2 orange parallel lines. The appearance of these lines when preceded by a strong trend is called a Pennant.
The 50 day MA has been holding support for the NZD since March. The Pennant reached the 50 SMA and price bounced off of support. Near term resistance is just north of .76. We would maintain a Long NZD position. Near term PNL could be taken at .76 while we target .78 for more significant profit taking.
