AUD/USD and NZD/USD Fundamental Analysis: US Debt Crisis Eyed

It is a quiet start to the day for the AUD/USD and NZD/USD. There are no Australian or New Zealand economic indicators for investors to consider.

The lack of stats will leave the Aussie and Kiwi in the hands of market risk sentiment. A bearish end to last week delivered the pairs with heavy losses. The US debt crisis and the increasing threat of a global recession weighed on riskier assets.

This morning, US debt ceiling-related news will influence ahead of the US session.

Later today, NY Empire State Manufacturing Index numbers for May will be in focus. Economists forecast a fall from 10.8 to -2.5, which would be bearish.

FOMC member commentary will also draw interest, with members Kashkari, Bostic, and Barkin speaking today.

AUD/USD Price Action

This morning, the AUD/USD was up 0.09% to $0.66453. A mixed start to the day saw the AUD/USD rise to an early high of $0.66475 before falling to a low of $0.66416.

Technical Indicators

Resistance & Support Levels

The AUD/USD needs to move through the $0.6661 pivot to target the First Major Resistance Level (R1) at $0.6685. A return to $0.6650 would signal a bullish session. However, the Aussie would need central bank chatter and debt ceiling news to support a breakout.

In case of a breakout session, the Aussie would likely test resistance at the Friday high of $0.67062 but fall short of the Second Major Resistance Level (R2) at $0.6731. The Third Major Resistance Level (R3) sits at $0.6801.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.6615 in play. However, barring a US debt ceiling-fueled sell-off, the AUD/USD pair should avoid sub $0.66 and the Second Major Support Level (S2) at $0.6591.

The Third Major Support Level (S3) sits at $0.6521.

Looking at the EMAs and the 4-hourly chart, the EMAs sent bearish signals. The AUD/USD sits below the 200-day EMA, currently at $0.67045. The 50-day EMA narrowed to the 100-day EMA, with the 100-day EMA converging on the 200-day EMA, delivering bearish signals.

A move through R1 ($0.6685) and the 200-day ($0.67039) and 100-day ($0.67039) EMAs would support a breakout from the 50-day EMA ($0.67133) to target R1 ($0.6731). However, failure to move through the 200-day EMA ($0.67039) would leave S1 ($0.6615) in view. A move through the 50-day EMA would be a bullish signal.

NZD/USD Price Action

This morning, the NZD/USD was up 0.12% to $0.61954. A mixed start to the day saw the NZD/USD fall to an early low of $0.61872 before rising to a high of $0.61959.

Technical Indicators

Resistance & Support Levels

The NZD/USD has to move through the $0.6224 pivot to target the First Major Resistance Level (R1) at $0.6265. A return to $0.6250 would signal a bullish session. However, US debt ceiling news must support a session breakout.

In the case of a breakout session, the Kiwi would likely test resistance at the Friday high of $0.63003 but fall short of the Second Major Resistance Level (R2) at $0.6342. The Third Major Resistance Level (R3) sits at $0.6460.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.6147 in play. However, barring another sell-off, the NZD/USD should steer clear of the Second Major Support Level (S2) at $0.6105.

The Third Major Support Level (S3) sits at $0.5987.

Looking at the EMAs and the 4-hourly chart, the EMAs sent bearish signals. The NZD/USD sits below the 200-day EMA, currently at $0.62394. The 50-day EMA narrowed to the 100-day EMA, with the 100-day EMA closing in on the 200-day EMA, delivering bearish signals.

A move through the 200-day ($0.62394) and 100-day ($0.62539) EMAs would support a breakout from R1 ($0.6265) to target the 50-day EMA ($0.62771). However, failure to move through the 200-day EMA ($0.62394) would leave S1 ($0.6147) in play. A move through the 50-day EMA would send a bullish signal.