AUD/NZD: Trans-Tasman analysis
|The AUD/NZD is an interesting pair to examine after the release of each country’s respective inflation reports yesterday.
In New Zealand, the annual inflation rate remained steady at 7.2%, prompting investors to forecast that inflation in the country has peaked, and the Reserve Bank of New Zealand can slow the pace of interest rate hikes moving forward, inducing a fall in the NZD against the US dollar. The next interest rate decision from the RBNZ is on February 22.
Australia’s inflation data, came in hotter-than-expected, at 7.8%, up from 7.3% in the previous reading. As a result, the Australian dollar climbed to a fresh 5-month high, almost the only major currency making a significant move against the US dollar on the day, as the market priced in a ninth consecutive rate rise by the Reserve Bank of Australia’s on February 7.
Naturally the AUD/NZD cross pair has begun to diverge quite significantly, with an emphatic break above the 200-EMA line, due to their respective performances against the USD. 1.09600 appears to be the most immediate level of resistance for the pair now, but doesn't seem to be holding up all that well against current buying activity, with the 20 EMA/ 1.09480 acting as the support.
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