Australian Dollar is trading broadly lower today, even against New Zealand Dollar. Risk sentiment isn’t much of a factor contributing to selloff considering that major European indexes are just in slight decline. Instead, the free fall in copper price might be a larger factor. But for sure, some traders could have jumped out of Aussie ahead of tomorrow’s CPI release too, which is crucial to RBA rate decision on May 2, i.e., next Tuesday.
As for Copper, the fall from 4.1743 is accelerating notably today. Deeper decline is expected as long as 3.3974 resistance holds, to 3.8229 support and below. Price structures from 4.3556 (Jan high) are so far corrective looking. Hence, strong support should emerge ahead of 100% projection of 4.3556 to 3.8229 from 4.1743 at 3.6416 to complete the correction, and bring sustainable rebound. However, sustained break of 3.6416 could risk more downside acceleration back towards 3.1314 (2022 low).
AUD/NZD’s steep fall from 1.0928 and firm break of 55 4H EMA indicates short term topping. It also raises the chance that whole rebound from 1.0585 has completed. Deeper decline is now in favor to 1.0732 support. Firm break there will pave the way back to 1.0585. Also, it’s a bit early to determine, but fall from 1.0928 could also be the third leg of the pattern from 1.1085. Hence, any downside acceleration would push AUD/NZD back to 1.0469 low easily.
