The AUD/NZD cross will be interesting to watch ahead of the Reserve Bank of New Zealand (RBNZ) rate announcement this week.
Areas of focus
Areas of focus heading into Wednesday’s risk event include three key resistance levels at NZ$1.0975 (entered the fray last week), NZ$1.1028, and NZ$1.1051, with the lower of the three boasting strong historical significance. Support to be cognisant of includes NZ$1.0880, a level that happens to be closely shadowed by trendline support extended from the low of NZ$1.0564.
While we have Aussie data out on Tuesday, it is unlikely to provide sufficient impetus to break this pair’s recent range between resistance at NZ$1.0975 and support at NZ$1.0880.
AUD/NZD range eyed
The RBNZ holding its Official Cash Rate unchanged at 5.5% for a ninth consecutive meeting could underpin a bid in the NZD and potentially guide the AUD/NZD pair below the current range support and possibly south of the neighbouring trendline support to test a support area at NZ$1.0817-NZ$1.0844.
Alternatively, a rate cut this week might send the cross higher, breaking range resistance and igniting a possible breakout buying opportunity in the direction of resistance between NZ$1.1051 and NZ$1.1028.
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