AUD/NZD Trades at a Six-Month Low Near 1.0540
- AUD/NZD reaches a six-month low Monday as the pair breaks out of a seven-day consolidation
- The Australian dollar is largely pressured this month across the board
AUD/NZD Trades at a Six-Month Low
The Australian dollar has been declining against its New Zealand counterpart. The AUD/NZD pair pushed through a dayslong resistance on Monday when it broke the level of consolidation between 1.0600 and 1.0550.
The 50-pip range has been acting as a consolidation area for the pair as buyers and sellers weren’t able to decide where to take the price. It took them seven days to tilt the pair to the low end and pierce the recent low of 1.0550.
On Monday, the exchange rate reached a session low of 1.0539, a level that formed a double bottom with another low from early February. AUD/NZD sellers yesterday retested a level reached on Feb 3 when the pair logged a low of 1.0540.
So far, the price behavior indicates the level is holding up rather strongly, while the pair is still undecided whether to break the six-month low or bounce from it and push higher. Currently, the AUD/NZD pair is trading around 1.0555.
Under Pressure and on the Defensive
In the medium term, the exchange rate has been largely under pressure. Since reaching a seven-month top on Mar 29, at 1.0946, the Australian dollar has been losing ground against the New Zealand dollar. For the period April to date, the Aussie has depreciated over 330 pips, or more than 3%, against the Kiwi dollar.
More recently, starting July, the Australian dollar hasn’t had many chances to move higher against the New Zealand dollar. The pair has been depressed and reaching lower lows every following week to realize a monthly loss of 1.60% from the opening price of 1.0725 to the current market price of 1.0555.
The Australian dollar has been on the defensive side across the board. The Australian government’s decision of zero-tolerance toward the spread of Covid-19 has benefited short-sellers of the local currency.
The AUD/USD pair, meanwhile, has declined almost 1.20% this month, while the AUD/JPY has dropped more than 2% for the same period.
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