AUD/NZD: can the bulls keep this up towards 1.0764 double top key target?

Ross J Burland FXStreet

Currently, AUD/NZD is trading at 1.0709, up 0.48% on the day, having posted a daily high at 1.0732 and low at 1.0640.

New Zealand's inflation substantially below the Reserve Bank's forecast - Westpac

AUD/NZD has taken full advantage of the miss in NZ CPI falling below the RBNZ's forecasts. New Zealand inflation data for Q2: CPI 0.0% q/q (expected +0.2%) while year on year arrived at 1.7% vs 1.9%.

The cross has been on the rampage since breaking up through the 1.04 handle with some consolidation above 1.0550 until 1.0596 and 1.0680. Today's data has given the bulls another green light on a foundation of dollar weakness in a continuation of the reversal of 1.0820 in the cross.

The Aussie has found traction on the recent improvements in the economy, however, analysts at Nomura explained, in respect to AUD/USD, that despite some better-than-expected Australian data and solid external growth momentum, they continue to think the domestic economy is faced with a number of underlying fundamental headwinds.

The bird, however, is facing its own challenges against the backdrop of this surprise miss in the CPI. The data was well below the Reserve Bank's forecast. " While the RBNZ has already been on the side of arguing that OCR hikes are a long way off. today's result should put a severe dent in market expectations that the RBNZ will be hiking rates by mid-2018," explained analysts at Westpac.

AUD/NZD levels

AUD/NZD is finding resistance just ahead of 21st Feb highs of 1.0743. 1.0764 are the 13th Oct 2016 highs and 28th Feb 2017 highs on a double top. 1.0820 is the ultimate target to make back the losses from 18th May 2017 sell-off. to the downside, 1.0550 is the key support on the wide.

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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