AUD/NZD bulls in charge at critical daily support into the RBA

AUD/NZD is attempting to correct from a strong daily bearish impulse.
Traders will be tuned into the RBA event today.

Ross J Burland FXStreet

AUDNZD is flat at the start of the Asian day near 1.0640 trading between a low of 1.0621 and 1.0648 following a thin market overnight with the US and UK closed for public holidays.

The next key event is the Reserve Bank of Australia and should the bank tilt away from their uber-dovish stance is would be expected to put a floor under the cross.

However, as analysts at ANZ bank explained, ''nobody is expecting any policy action, but if we see any firming in the tone, that would likely give the AUD a boost, which would likely spill over into the NZD.''

''It may reference the recent lockdown as a reminder that downside risks remain. We don’t expect its policy message to change from that in May, nor for there to be any hints about the July decisions on the fate of QE and YT. Governor Lowe may use a speech on 17 June to outline the RBA’s thinking on the fate of these policies,'' the analysts added.

As for the kiwi, the analysts said, ''we think the NZD story remains a positive one, with the economy likely sufficiently strong that it can sustain some normalisation in monetary policy that is likely to occur sooner than peers. That speaks to broad-based NZD elevation.''

AUD/NZD technical analysis

As per the prior analysis, AUD/NZD Price Analysis: Bulls step up at critical support, the price has met support and is on course for a deeper upside correction.

Prior analysis, daily chart

''The price melted to the downside without a second thought but has since met a prior support level and has started to consolidate.

There are prospects of a significant correction at this juncture.''

Live market, daily chart

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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