AUD/USD and NZD/USD Outlook: Rally Momentum Pauses as USD Stabilises

AUD/USD and NZD/USD have been among the strongest FX performers this week as broad US dollar weakness lifted high-beta currencies. However, late-session price action on Tuesday showed signs of hesitation, with both pairs stalling at technically significant levels. While momentum remains constructive, the failure to extend gains raises the risk of a near-term pullback should the US dollar find support.

Broader FX Context

Markets rarely move in straight lines, particularly after sharp directional moves. With several major pairs closing off their session highs against the US dollar, the potential for a short-term USD bounce has increased. If that occurs, currencies that outperformed most aggressively earlier in the week, including the Australian and New Zealand dollars, could be the most vulnerable to consolidation or retracement.

AUD/USD Technical Outlook

AUD/USD has pushed back toward the upper boundary of its established trading range, briefly moving above the 0.6740 area before easing into the close. This zone previously attracted sellers in late December, making it a clear area of interest once again.

Failure to break and sustain trade above the 0.6750 level would leave the pair exposed to a pullback toward the lower end of the range near 0.6680. From a momentum perspective, RSI remains above the neutral 50 level but continues to reflect a broader downtrend, suggesting upside strength may be fading. MACD is less decisive, with momentum flattening near the signal line. In this environment, price action at range extremes carries greater weight than indicator signals alone.

AUD/USD Daily Chart

NZD/USD Technical Outlook

NZD/USD has also delivered an impressive rebound, breaking higher from a falling wedge pattern and rallying back toward prior resistance near 0.5840. As is often the case following wedge breakouts, price has stalled near the origin of the pattern, an area that has capped advances in the past.

While momentum indicators remain supportive, with RSI strengthening and MACD in bullish configuration, overhead resistance and the proximity of the 200-day moving average introduce downside risk if follow-through fails. A renewed rejection near current levels would open the door to a corrective move toward the 0.5800 handle, with deeper pullbacks potentially targeting the 50-day moving average.

NZD/USD Daily Chart

Bottom Line

AUD/USD and NZD/USD remain constructive in a broader sense, but both pairs are now testing levels where upside momentum has historically struggled to persist. With the US dollar showing early signs of stabilisation, near-term risks appear skewed toward consolidation or pullback rather than immediate continuation higher. As conditions remain headline-driven, flexibility and close attention to price behaviour at key levels will be essential.