AUD/NZD defends weekly low around 1.0900, RBA policy in focus
- AUD/NZD has rebounded firmly around the critical support of 1.0900.
- The RBA will elevate its interest rates by 50 bps to 1.85%.
- The NZ economy is likely to report upbeat employment data.
The AUD/NZD pair has rebounded sharply after slipping to near the critical support of 1.0900 in the Asian session. The asset has picked significant bids and a responsive buying action is in the making. Usually, a responsive buying action indicates heavy longs creation by the market participants when they found the asset a value bet.
The cross is fading the downside momentum as investors are expecting hawkish commentary from the Reserve Bank of Australia (RBA). RBA Governor Philip Lowe is expected to elevate its Official Cash Rate (OCR) consecutively for a third time by 50 basis points (bps). Price pressures are scaling higher in the Australian economy as the inflation rate has reached to 6.1% second quarter of CY2022. The inflation rate sees no exhaustion in its upside momentum yet as oil and food products prices are still volatile and are showing promising upside going ahead.
In today’s session, the release of the Caixin Manufacturing PMI data holds significant importance. The economic data is seen slightly lower at 51.5 from the prior release of 51.7. It is worth noting that Australia is a leading trading partner of China and a slump in Chinese manufacturing activities will affect the antipodean.
On the NZ front, kiwi bulls are awaiting the release of the employment data, which is due on Tuesday. The Unemployment Rate is likely to drop to 3.1% from the prior release of 3.2%. Apart from that the Employment Change may increase to 0.4% from the prior increase of 0.1%.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
