AUD/NZD Price Analysis: Breaks seven-week-old support on hawkish RBNZ
- AUD/NZD marks the heaviest daily loss since late May as RBNZ hints at tapering.
- Clear U-turn from 200-DMA, bearish MACD and downside break of short-term key support also favor bears.
AUD/NZD slumps around 70 pips to recently around 1.0640, down 0.74% intraday, following the RBNZ meeting on early Wednesday. In doing so, the cross-currency pair drops the most since May 26 while breaking a nearby ascending support line, now resistance.
RBNZ announces tapering of bond purchases during late July while matching wide market expectations of no rate hike in its latest monetary policy update.
Read: Breaking: RBNZ leaves official cash rate unchanged at 0.25% as expected
Given the MACD turning most bearish in nearly two months, the trend line breakdown and sustained U-turn from 200-SMA directs AUD/NZD towards the May month’s low surrounding 1.0600 threshold.
It should, however, be noted that the quote needs to close below the late February’s low of 1.0638 to aim for 1.0600, else a corrective pullback towards the previous support line near 1.0665 can’t be ruled out.
In a case where the AUD/NZD prices remain weak below 1.0600, the yearly low marked in February around 1.0540 will be the key to watch.
Meanwhile, corrective pullback beyond the recently broken support line, around 1.0665, will again aim for a 200-SMA level of 1.0734. Though, the bulls are less likely to be convinced until the pair rises past June 28 top surrounding 1.0770.
AUD/NZD: Four-hour chart
Trend: Further downside expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
