- On Wednesday, the AUD/NZD dropped significantly, reaching its lowest level since March around 1.0740.
- Australian Q1 GDP growth was reported slightly below expectations, signaling a slowdown in the economy.
- The RBA is set to keep an eye on inflation, which might be the primary focus for monetary policy decisions.
The AUD/NZD continued its bearish trajectory on Wednesday, declining to its lowest level since March, registered at around 1.0740 amid the newly released Australian Gross Domestic Product (GDP) Q1 data.
In Australia, reported Q1 GDP figures came in slightly below market anticipations, with sluggish growth of 0.1% QoQ below the predicted 0.2%, indicating a moderated pace in the economy. Also, the YoY rate landed at 1.1%, lower than the projected figure and down from the corrected 1.6% in Q4 of the previous year. Furthermore, recent services and composite PMI readings for May appeared softer than preliminary estimates.
Despite these developments, the RBA, accentuated by Governor Michele Bullock, is likely to maintain its attention on bringing inflation back to its target. In that sense, future monetary policy decisions are probably more influenced by this goal rather than short-term economic oscillations. While tightening monetary policy was a point of discussion in the last meeting, investors took those off the table those odds and for the next meeting in June are just seeing around 30% odds of a cut.
AUD/NZD technical analysis
The technical outlook has further deepened into bearish territory. However, the daily Relative Strength Index (RSI) showed oversold conditions, indicating a potential upward correction may be on the horizon. This is further supported by the Moving Average Convergence Divergence (MACD), which shows a reduction in red bars, confirming the potential of an uptrend.
As the bearish trend persists with the pair below its 20,100 and 200-day Simple Moving Averages (SMAs) and in multi-month lows, the focus will be whether the downward trend continues or an upward correction happens.
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. 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 retreats from daily highs, holds above 1.0800
EUR/USD loses traction but holds above 1.0800 after touching its highest level in three weeks above 1.0840. Nonfarm Payrolls in the US rose more than expected in June but downward revisions to May and April don't allow the USD to gather strength.
GBP/USD struggles to hold above 1.2800 after US jobs data
GBP/USD spiked above 1.2800 with the immediate reaction to the mixed US jobs report but retreated below this level. Nonfarm Payrolls in the US rose 206,000 in June. The Unemployment Rate ticked up to 4.1% and annual wage inflation declined to 3.9%.
Gold approaches $2,380 on robust NFP data
Gold intensifies the bullish stance for the day, rising to the vicinity of the $2,380 region following the publication of the US labour market report for the month of June. The benchmark 10-year US Treasury bond yield stays deep in the red near 4.3%, helping XAU/USD push higher.
Crypto Today: Bitcoin, Ethereum and Ripple lose key support levels, extend declines on Friday
Crypto market lost nearly 6% in market capitalization, down to $2.121 trillion. Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) erased recent gains from 2024.
French Elections Preview: Euro to “sell the fact” on a hung parliament scenario Premium
Investors expect Frances's second round of parliamentary elections to end with a hung parliament. Keeping extremists out of power is priced in and could result in profit-taking on Euro gains.