AUD/NZD slides for fourth straight session, seems vulnerable to weaken further

Extending its reversal from monthly high near 1.0750 region, the AUD/NZD cross dropped to a fresh two-week low before retracing few pips to currently trade around 1.0500 handle.

The New-Zealand Dollar's relative outperformance against its Australian counterpart has been driven by a sharp rise in dairy prices at the latest Global Dairy Trade (GDT) auction on August 16. 

Since then, the kiwi has been gaining traction and is now trading lower for fourth straight session and now seems to have confirmed a break below 50-day SMA support. 

Moreover, the pair also seems to have formed a bearish double-top chart pattern around 1.0730-50 region, which would be confirmed on a sustained weakness below 1.0500 mark. 

Technical levels to watch

On a sustained weakness below 1.0500 handle, the cross seems to immediately drop to test monthly lows support near 1.0450 level, below which the near-term downward trajectory is likely to get extended towards testing its next major support near 1.0350 region.

Meanwhile on the upside, 50-day SMA support break-point near 1.0540 region now seems to act as immediate strong resistance. A convincing strength above this immediate resistance has the potential to boost the pair immediately towards 1.0575-80 horizontal resistance before the pair attempts to reclaim 1.0600 handle and head towards testing weekly high resistance near 1.0640 area.