Aussie and Kiwi Currencies Hit Technical Speed Bump
The Australian and New Zealand dollars have been boosted by a weaker US dollar, reaching near two-and-a-half-month highs. However, they are now facing technical chart levels that often act as speed bumps.
The Aussie dollar hovered around $0.7165 after a strong finish to last week, with traders eyeing resistance near $0.72 and then $0.7278. The New Zealand dollar sat near $0.5975, with a well-watched 'double top' area around $0.5993.
The backdrop for these movements is driven by US economic factors, including softer demand for the dollar and investor concerns over US fiscal and inflation worries that may keep pressure on the greenback.
In Australia, traders are waiting to see if inflation stays high enough to prompt the Reserve Bank of Australia (RBA) into action. The RBA's August meeting minutes and monthly inflation print will be closely watched for signs of a potential rate hike.