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By: Matt Simpson, Market Analyst
The Australian dollar is showing early signs of momentum loss despite strong bullish positioning in futures markets. Matt Simpson notes that "there's not really an appetite to short", with asset managers holding record net long exposure, reinforcing the broader uptrend. However, this positioning strength is not translating cleanly into price action, as the Australian dollar struggles to sustain gains above key resistance. Traders may begin to reassess near-term upside potential, particularly as resistance near 0.73 continues to cap further advances.
The New Zealand dollar is gaining relative strength as technical momentum improves on shorter timeframes. Simpson highlights that "the breakout of yesterday was far more impressive than seen on the Aussie dollar", pointing to a clear shift in price behavior. Specifically, the New Zealand dollar holding above its 250-day exponential moving average and breaking above prior ranges signals a more constructive near-term outlook. Capital may rotate toward NZD in the short term, particularly among traders seeking cleaner breakout structures.
AUD/NZD is exhibiting a technical pattern that points to increasing downside risk in the near term. Simpson identifies a rising wedge formation, noting that it "could see a movement back towards this swing low around 1.1932", which is typically associated with weakening bullish momentum. This pattern suggests that buyers are losing control at higher levels, even as the broader trend remains intact. A corrective move lower becomes more likely, particularly while price remains below recent swing highs.
AUD/NZD continues to hold a strong long-term bullish structure despite emerging short-term weakness. Simpson emphasizes that "we've just seen the best 12-month rally since 2008", highlighting the strength of the broader trend. This sustained move reflects underlying structural drivers that have supported the pair since 2020, reinforcing the longer-term outlook. However, short-term corrections within such trends are common, and any pullback may ultimately present opportunities for re-entry in line with the dominant upward trajectory.
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--- Written by Frédéric Guétin, StoneX TV Producer
--- Expert: Matt Simpson, FOREX.com APAC Market Analyst
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