AUD/NZD hammered below 1.0400 level to 7-week lows

Extending its reversal from monthly highs at 1.0.745 region near 100-day SMA, the AUD/NZD cross has now broken below 1.0400 handle to hit a fresh 7-week low. 

Currently trading at 1.0365 level, the cross weakened for third consecutive day as the Australian Dollar's underperformance against its New-Zealand counterpart could primarily be attributed to persistent weakness in copper prices. Moreover, the New-Zealand Dollar has been benefitting from a sharp rise in dairy prices at the latest Global Dairy Trade (GDT) auction on August 16 and hawkish comments from RBNZ's Wheeler that dismissed need for aggressive interest rate cuts. 

From technical perspective, the pair had formed a bearish double-top chart pattern around 1.0730-50 region and a subsequent weakness below 1.0500 mark confirmed the bearish pattern. Hence, even from current levels the pair remains vulnerable to extend its downslide in the near-term.

Technical levels to watch

From current levels, 1.0340 level seems to act as immediate support below which the downfall seems to drag the cross below July monthly lows support near 1.0310 region, towards testing its next major support near 1.0200 round figure mark.

On the flip side, any recovery attempt might now confront immediate resistance near 1.0400 handle, which if cleared has could extend the recovery towards 1.0450 resistance area. Even if the pair manages to clear 1.0450 hurdle, further recovery now seems to be capped at an important support break-point turned strong resistance near 1.0500 psychological mark.