AUD/NZD downside move stalls for the time being

Technical Analysis

Author: Justin Low | audnzd

The aussie is getting a strong lift from Xi's speech today

The pair was looking in dire straits yesterday after a report that China may potentially devalue the yuan in a trade war against the US. But Xi's speech today sort of quashes the odds of that - at least for the time being.

And that has helped lift the aussie - which also benefited from the risk-on mood - on the day.

Against the kiwi, the aussie is making up for losses sustained yesterday as the pair inches higher to 1.0552. But now the previous support level is turning back to a resistance level for buyers.

The June highs @ 1.0551 from last year was a support level in the pair over the past trading week, but has now returned back to its roots as a resistance level for the pair. If buyers are already failing to find a way above the first test, it doesn't bode well for the pair since the downtrend channel is still holding up, as momentum is still clearly with sellers at this point.

At least for now, the test of the multi-year support level will have to wait for a bit longer.

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