AUD/USD and NZD/USD highly correlated with USD/CNH
Traders can use the correlation coefficient on the 240-minute timeframe to help them determine where AUD/USD and NZD/USD may be headed next.
Share this:
USD/CNH has been on the move as fears of additional lockdowns due to covid grip the markets. Lockdowns could lead to slower production and slower growth. Shanghai is currently entering its fourth week of lockdowns and fears are that Beijing could be next. As a result, the Yuan has sold off, causing USD/CNH to move higher.
On a daily timeframe, USD/CNH broke out of its descending wedge on April 19th and hasn’t looked back. The target for the breakout of a descending wedge is a 100% retracement of the wedge. The wedge began on April 1, 2021 at 6.5876 and began moving lower. Once price broke above the top trendline of the wedge at 6.3910, it only took 5 days to retracement the whole descending wedge!
Source: Tradingview, Stone X
If the markets worst fears do turn out to be true and China can’t avoid a longer-term slowdown, Australia and New Zealand are likely to take a hit as well, as they are both large exporters to China.
On a 240-minute timeframe, notice at the bottom of the chart that the correlation coefficient between AUD/USD and USD/CNH is -0.97. A reading of -1.00 means that there is a perfect negative correlation. In other words, when one currency pair moves higher, the other moves lower. A reading of -0.97 is extremely close! Therefore, if USD/CNH is ready for a correction, then AUD/USD should move higher. Also notice that the RSI on in oversold territory, an indication that the pair may be ready for a bounce. First resistance isn’t until 0.7347 and then 0.7458. The next support level is at 0.7095.
Source: Tradingview, Stone X
The correlation coefficient between NZD/USD and USD/CNH on a 240-minute timeframe is similar to the one of AUD/USD and USD/CNH at -0.94. Notice that the RSI here is also in oversold territory, indicating a possible bounce in price. First resistance in NZD/USD is at 0.6717 and then 0.6813. However, if price continues lower, the first support level for the pair isn’t until 0.6533.
Source: Tradingview, Stone X
USD/CNH has been moving higher for the last 5 trading sessions. As a result, AUD/USD and NZD/USD have been moving lower. Traders can use the correlation coefficient on the lower 240-minute timeframe between USD/CNH and the 2 pairs to help them determine where AUD/USD and NZD/USD may be headed next.
USD/CNH has been on the move as fears of additional lockdowns due to covid grip the markets. Lockdowns could lead to slower production and slower growth. Shanghai is currently entering its fourth week of lockdowns and fears are that Beijing could be next. As a result, the Yuan has sold off, causing USD/CNH to move higher.
On a daily timeframe, USD/CNH broke out of its descending wedge on April 19th and hasn’t looked back. The target for the breakout of a descending wedge is a 100% retracement of the wedge. The wedge began on April 1, 2021 at 6.5876 and began moving lower. Once price broke above the top trendline of the wedge at 6.3910, it only took 5 days to retracement the whole descending wedge!
Source: Tradingview, Stone X
Trade USD/CNH now: Login or Open a new account!
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
If the markets worst fears do turn out to be true and China can’t avoid a longer-term slowdown, Australia and New Zealand are likely to take a hit as well, as they are both large exporters to China.
On a 240-minute timeframe, notice at the bottom of the chart that the correlation coefficient between AUD/USD and USD/CNH is -0.97. A reading of -1.00 means that there is a perfect negative correlation. In other words, when one currency pair moves higher, the other moves lower. A reading of -0.97 is extremely close! Therefore, if USD/CNH is ready for a correction, then AUD/USD should move higher. Also notice that the RSI on in oversold territory, an indication that the pair may be ready for a bounce. First resistance isn’t until 0.7347 and then 0.7458. The next support level is at 0.7095.
Source: Tradingview, Stone X
Trade AUD/USD now: Login or Open a new account!
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
The correlation coefficient between NZD/USD and USD/CNH on a 240-minute timeframe is similar to the one of AUD/USD and USD/CNH at -0.94. Notice that the RSI here is also in oversold territory, indicating a possible bounce in price. First resistance in NZD/USD is at 0.6717 and then 0.6813. However, if price continues lower, the first support level for the pair isn’t until 0.6533.
Source: Tradingview, Stone X
Trade NZD/USD now: Login or Open a new account!
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
USD/CNH has been moving higher for the last 5 trading sessions. As a result, AUD/USD and NZD/USD have been moving lower. Traders can use the correlation coefficient on the lower 240-minute timeframe between USD/CNH and the 2 pairs to help them determine where AUD/USD and NZD/USD may be headed next.
Learn more about forex trading opportunities.
Related tags:
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Japanese Yen Forecast: USD/JPY 4% Rally Challenges Post-Intervention Downtrend 9 24 2026
USD/JPY momentum has shifted sharply higher, putting a major resistance confluence in focus as U.S. and Japanese event risk builds.
Oil Quietly Hands the Fed a Reason to Stay Hawkish
Oil prices and the U.S. dollar are both on the front foot as elevated energy costs feed Fed warnings that inflation may prove sticky.
S&P 500 forecast: Stocks extend drop as correction risks grow
US and global equity markets have extended Wednesday’s sell-off, with Wall Street opening lower after a weak handover from Asia and Europe. The deterioration in risk appetite has been spreading across global markets. The dollar was firmer, Treasury yields were holding onto yesterday’s gains, while gold, silver and bitcoin were all under pressure alongside equities and major currencies.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.