Australian Dollar Price Action Setups: EUR/NZD, GBP/AUD, EUR/AUD

The Australian dollar retains the upper hand across several crosses, supported by renewed RBA hike bets and relatively firm domestic fundamentals. However, stretched short-term momentum suggests the Aussie may be vulnerable to some consolidation first, leaving room for rebounds in NZD, GBP and EUR before the broader trends potentially reassert themselves.

AUD/NZD is testing a potential bullish breakout, while GBP/AUD and EUR/AUD remain under broader downside pressure despite signs that both pairs could retrace higher in the near term.

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Source: LSEG

Australian Dollar Setups Across AUD/NZD, GBP/AUD and EUR/AUD

AUD/NZD Technical Analysis: Australian Dollar vs New Zealand Dollar

The weekly chart shows a strong uptrend overall, with a potential falling wedge breakout now in motion. If successful, the pattern projects an upside target near the cycle highs. Though I should warn that the lines are there to show the general framework of the pattern and are not assumed support and resistance levels.

It has been a slow start to the week, with a spinning-top doji forming on Monday. This warns that bulls are losing steam and may be in need of a breather, raising the potential for a pullback towards the weekly pivot point or 10- and 20-day EMAs. But if the falling wedge pattern holds true, perhaps a swing low can form on the daily chart to see AUD/NZD break higher and head for 1.22.

Note that the RBNZ is expected to deliver a hawkish hike tomorrow, which could help AUD/NZD pull back further. Though a lack of hawkish tone — while unlikely — could help AUD/NZD break higher sooner.

Source: ICE, TradingView

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GBP/AUD Technical Analysis: British Pound vs Australian Dollar

The Bank of England is now expected to deliver a hawkish hold in September, while the UK labour market has remained soft enough to reduce persistent fears of domestically generated inflation. Given the recently renewed bets of RBA hikes, this has provided GBP/AUD bears with an ideal divergent theme between the BOE and RBA.

The weekly chart remains in a downtrend and continues to show the potential for a move down to the 1.88 low of the elongated bullish engulfing candle. The suspected bearish breakout of 1.90 arrived on Wednesday after a series of lower highs into the level warned of such a move.

A small doji formed on Monday to show bears are losing steam, so perhaps a minor pullback could be on the cards. Though with the trend pointing lower for now, bears may be seeking to fade moves towards resistance levels such as the weekly pivot point (1.8950), 10-day EMA (1.8983) and monthly S1 pivot. Note the weekly R1 pivot is also near the 20-day EMA, while the weekly S1 sits just above the 1.8799 swing low.

GBP/AUD weekly and daily charts show a bearish British pound trend towards 1.88 against the Australian dollar.

Source: ICE, TradingView

EUR/AUD Technical Analysis: Euro vs Australian Dollar

The euro finds itself in a similar scenario to the British pound when it comes to the Aussie, in that the weekly charts suggest EUR/AUD wants to break lower but near-term risks are skewed to the upside. The weekly chart shows a dominant downtrend with rising bearish volatility. Prices are holding above support for now, bit a break of the March low brings 1.60 into focus.

A bullish engulfing candle formed on Monday. While the weekly pivot point is capping as resistance for now, a retracement towards the 1.6249 swing low, 10-day EMA could be on the cards. Even if prices manage to break higher towards the weekly pivot point or 20-day EMA, I suspect bears may be seeking to fade into moves into such resistance levels in anticipation of the break of the March low.

Source: ICE, TradingView

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