AUD/NZD: All eyes on Australian confidence data and RBNZ
|- The AUD/NZD pair began Wednesday’s Asian trading session with fewer gains around 1.0530.
- Next up in the radar will be monthly release of Australian Westpac consumer sentiment index followed by the RBNZ monetary policy meeting.
- The pair needs to clear 1.0540 resistance else its pullback to the 1.0500 support-line can’t be denied.
The Australian Dollar (AUD) trades little changed around 1.0530 against the New Zealand Dollar (NZD) while Asian trading just began on Wednesday. The pair registered gains on Tuesday as renewed hopes of the US-China trade deal and welcome business survey results from Australia helped build positive sentiment. For now, traders await monthly release of Westpac consumer sentiment index from Australia prior to tightening their belts for quarterly monetary policy statement by the Reserve Bank of New Zealand (RBNZ).
Monthly release of National Australia Bank’s business survey revealed that the business conditions surged to 7 against prior 3 and business confidence rose to 4 from 3 noted in December last year. The news built initial upside sentiment of the AUD/NZD pair on early Tuesday.
Those moves were then carried forward after the US President Donald Trump signalled brighter chances of the US-China trade deal at a rally in Mexico. The news pleased Aussie traders as anything positive for the Australia’s biggest consumer is good for the AUD too.
Looking forward, February month Westpac consumer sentiment and results of the RBNZ monetary policy meeting will be closely observed for fresh impulse. The Westpac Consumer Confidence data dropped to -4.7% last-month whereas the RBNZ is likely to show bearish bias with no change in present monetary policy.
Latest New Zealand statistics like last-week’s employment details, earlier inflation figures and the third quarter GDP growth all point to one direction, i.e. a bearish bias by the RBNZ. Not only domestic data but uncertainty over the US-China trade deal and pessimism surrounding global economic growth might also push the New Zealand central bank to follow Reserve Bank of Australia (RBA) like dovish statements in spite of holding their “no immediate rate change” outlook.
While weaker AU data may trigger the pair AUD/NZD pair’s pullback, a dovish outlook from the RBNZ and/or bearish statements from the Governor, after an hour past rate announcement, could continue fuelling the pair to north.
AUD/NZD Technical Analysis
Unless offering a decisive break beyond 1.0540, the pair is less likely to aim for 1.0565 and 1.0600 resistance levels while 1.0620 and 1.0645 can limit the upside after 1.0600.
An upward sloping trend-line at 1.0500 seem immediate support for the pair, a break of which can highlight 1.0480 and 1.0455 rest-points.
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