- AUD/NZD drops 50 pips to refresh multi-day low after Australia’s Monthly CPI for May disappoints.
- Nearly oversold RSI, fortnight-old support line challenge bears at monthly low.
- Bulls need successful break of three-week-old horizontal resistance to retake control.
AUD/NZD slumps 50 pips to refresh the monthly low around 1.0800 after Australia’s headline inflation data disappoint the buyers on early Wednesday. That said, the pair rebounds to 1.0825 following the data.
That said, Australia’s Monthly Consumer Price Index (CPI) for May drops to 5.6% YoY versus 6.1% expected and 6.8% prior. The same amplifies concerns about the Reserve Bank of Australia’s (RBA) pause in the rate hikes after two consecutive hawkish surprises, which in turn drowns the Australian Dollar (AUD) versus other currencies.
It should be noted that the improvement in China Industrial Profits for May, -12.6% YoY versus -18.2% prior, appeared to have a put a floor under the AUD/JPY price after the Aussie inflation data.
Technically, the nearly oversold RSI conditions join the two-week-old falling support line to trigger the quote’s latest bounce. However, the 200-SMA restricts the immediate upside of the pair near 1.0850.
Following that, a broad resistance zone comprising multiple levels marked since early June, near 1.0910-35, will be a tough nut to crack for the AUD/NZD bulls.
Meanwhile, a downside break of the immediate support line, close to 1.0790 by the press time, will direct the AUD/NZD price to the 61.8% Fibonacci retracement of the May-June upside, near 1.0750.
In a case where the exotic pair remains bearish past 1.0750, the 1.0700 round figure may act as the last defense of the bulls.
AUD/NZD: Four-hour chart
Trend: Corrective bounce expected
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD drops to near 1.0600, awaits US inflation data
The EUR/USD pair remains under pressure on Wednesday, holding steady just above the 1.0600 level during Asian trading hours. This would mark the fourth consecutive day of losses for the Euro, as the pair continues to face downward momentum.
GBP/USD falls to near 1.2750 ahead of BoE Mann speech
GBP/USD extends its losing streak for the fourth successive session, trading around 1.2740 during the Asian hours on Wednesday. This downside of the pair is attributed to a stronger US Dollar amid optimism around the Trump trades.
Gold price sticks to gains above $2,600 amid some repositioning ahead of US CPI
Gold price staged a notable recovery from a nearly two-month low touched on Tuesday. Elevated US bond yields and a bullish USD might cap gains for the non-yielding XAU/USD. Traders now look forward to the crucial US consumer inflation figures for a fresh impetus.
US CPI data preview: Inflation expected to rebound for first time in seven months
The US Consumer Price Index is set to rise 2.6% YoY in October, faster than September’s 2.4% increase. Annual core CPI inflation is expected to remain at 3.3% in October. The inflation data could significantly impact the market’s pricing of the Fed’s interest rate outlook and the US Dollar value.
Five fundamentals: Fallout from the US election, inflation, and a timely speech from Powell stand out Premium
What a week – the US election lived up to their hype, at least when it comes to market volatility. There is no time to rest, with politics, geopolitics, and economic data promising more volatility ahead.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.