fxs_header_sponsor_anchor

News

AUD/NZD rallies as RBNZ signals dovish shift

  • AUD/NZD witnessed a significant rise to 1.1090, to multi-year highs.
  • The RBNZ kept rates steady at 5.5%, signaling a willingness to ease sooner rather than later.
  • RBA and RBNZ policy discrepancies might favor the AUD.

On Wednesday, the AUD/NZD rose to a fresh high since 2022, in reaction to the Reserve Bank of New Zealand (RBNZ) decision.

The RBNZ, as expected, kept the Official Cash Rate (OCR) anchored at 5.50%, but hinted at potential rate cuts in the near future. The RBNZ highlighted the signs of easing inflation persistence and the expectation of headline CPI returning to target in the second half of the year. Moreover, it addressed the impact of tight policy measures on the economy and deviated from the May 22 meeting where Governor Orr confessed that a hike was a "real consideration".

Following the decision, a rate cut is now priced in October, with the market pricing in nearly 60% odds of an earlier cut in August. On the other hand, while the Reserve Bank of Australia (RBA) seriously considers a hike, the pair may see more upside.

AUD/NZD technical analysis

In the short-term, the AUD/NZD maintains a bullish momentum due to the recent rally but overbought conditions seen in the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) indicate that a correction may be imminent.

Support levels have moved and now stand at 1.1050, 1.1000, and 1.0950. The next challenge for buyers is to reach and retain the 1.1100 target point.

AUD/NZD daily chart

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.


RELATED CONTENT

Loading ...



Copyright © 2024 FOREXSTREET S.L., All rights reserved.