AUD/NZD recovers from 4-1/2 month low, awaits range breakout
The sharp recovery in the AUD/NZD pair from the 4-1/2 month low of 1.0380 has ensured the recent range of 1.04-1.0550 is still intact. The cross was last seen trading at 1.0427 levels.
The NZD picked up bid earlier today after the details of the RBNZ policy statement carried upbeat comments about the state of the domestic economy, which mean less odds of a rate cut in the near future. The pair thus dropped to a low of 1.0380.
However, the bid tone around the Aussie dollar strengthened, courtesy of a 0.5% rise in gold prices and the moderate recovery in the oil prices. That helped the cross trim losses.
On a larger time frame of 1-3 months, the Westpac Analysts see a scope for rally to 1.09 as iron ore could rally on the back of high steel prices.
AUD/NZD Technical Levels
A break above 1.0455 (session high) would expose resistance at 1.0550 (range hurdle) and 1.0606 (200-DMA). A daily close above 1.0550 would also signal upside break from the trading range and may yield 1.07 (target as per the measured height method).
On the downside, failure to hold above 1.0412 (June 14 low) would open up downside towards 1.0390 (June 2 low) and 1.0378 (Feb 7 low).
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
