AUD/NZD drifting into 1.0865 as positive China comments pull Aussie higher

The Aussie is shifting higher after China bullies markets on CNY speculation.
Upside capped by recent downswings, but there's room to run if sentiment holds.
Australian unemployment data in the mid-week could help or hurt depending on market sentiment.

Joshua Gibson FXStreet

The AUD/NZD caught a bump on Monday, trading into the 1.0870 region after kicking the trading week off near 1.0840. The Aussie (AUD) has caught a minor lift back into familiar territory after drifting to a medium-term low near 1.0820 late last week, getting bolstered by improving risk sentiment from China.

Chinese authorities are hitting markets with strong talking points early in the week, essentially warning market participants that they should “voluntarily maintain a stable market” and avoid excessive speculation trading.

Aussie getting dragged higher by up-step from China

The Renminbi (CNY) saw a much stronger fix than usual, and the upside momentum for the Chinese currency is dragging the Aussie higher, with Australia taking pride of place as China’s largest trading partner.

Things are light on the Kiwi (NZD) side, and changes in market dynamics will rest firmly in the hands of AUD traders for the week. The data point of note for the Aussie this week will be unemployment figures due on Wednesday, which markets are broadly expecting to hold steady at 3.7%.

AUD/NZD technical outlook

The Aussie-Kiwi pairing is holding steady in consolidation territory just below the 1.0880 level, but the floor has been sagging in recent days, and each downturn for the AUD sees fresh lows. Chart action is now tapping into a declining trendline baked into the 4-hour candles, and a turnaround from this region will see new bearish challenges of the 1.0820 handle.

On the bullish side, a fresh break to the high side will see significant action around the 1.1000 major psychological level, a region from which the Aussie faced rejection seven weeks ago. Meanwhile, a rough wedge on the daily candles is running aground of consolidating support from the constrained 50-day Exponential Moving Average and 100-day Simple Moving Average.

AUD/NZD 4-hour chart

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

EUR/USD extends its optimism past 1.1900

EUR/USD retains a firm underlying bid, surpassing the 1.1900 mark as the NA session draws to a close on Monday. The pair’s persistent uptrend comes as the US Dollar remains on the defensive, with traders staying cautious ahead of upcoming US NFP prints and CPI data.

GBP/USD hits three-day peaks, targets 1.3700

GBP/USD is clocking decent gains at the start of the week, advancing to three-day highs near 1.3670 and building on Friday’s solid performance. The better tone in the British Pound comes on the back of the intense sekk-off in the Greenback and despite re-emerging signs of a fresh government crisis in the UK.

Gold pushes back above $5,000

The daily chart shows spot Gold in a parabolic uptrend that accelerated sharply from the $4,600 area in late January, printing a record high at $5,598.25 before a violent reversal erased nearly $1,000 in value during the final days of the month.

Litecoin eyes $50 as heavy losses weigh on investors

Following a strong downtrend across the crypto market over the past week, Litecoin holders are under immense pressure. The Bitcoin fork has trimmed about $1.81 billion from its market capitalization since the beginning of the year, sending it below the top 20 cryptos by market cap.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Ripple exposed to volatility amid low retail interest, modest fund inflows

Ripple (XRP) is extending its intraday decline to around $1.40 at the time of writing on Monday amid growing pressure from the retail market and risk-off sentiment that continues to keep investors on the sidelines.