AUD/NZD - correction gathers pace on the dismal Australia capex report

The technical correction in the AUD/NZD gathered pace following the release of a dismal forward looking Australia private capital expenditure number.

The currency pair dropped from 1.0713 to 1.0662 levels as the 10-year Aussie bond yield extended losses to 2.80%.

Sharp retreat from the high of 1.0748 on Wednesday suggested the bullish move from the January 31 low of 1.0326 could have run out of steam. Thus, the cross already traded on the back foot at around 1.0713 levels before the dismal Aussie capex report hit the wires.

At the time of writing, the pair was trading around 1.0670 levels. This is the first time since February 8 that the pair is trading below the 10-DMA level.

AUD/NZD Technical Levels

Breach of strong support at 1.0634 (Feb 16 low) could yield a sell-off to 1.0572 (Jan 11 high) under which the losses could be extended to 1.0537 (50% fib of 1.0326-1.0748). On the other hand, a break above 1.0692 (5-DMA) would shift risk in favor of a re-test of 1.0722, where a violation would expose yesterday’s high of 1.0748.