AUD/NZD refreshes yearly top to 1.0480 as coronavirus news dominate
- AUD/NZD remains positive amid the sustained comparative New Zealand dollar weakness ahead of the RBNZ.
- The pair pays a little heed to the second-tier Aussie and New Zealand data.
- Some more of the Australian economics, coronavirus headlines will be followed for intermediate clues.
AUD/NZD takes the bids to 1.0475 during the Asian session on Tuesday. That said, the pair recently flashed a fresh yearly top of 1.0480. While risks emanating from China’s coronavirus are currently in the spotlight, the New Zealand dollar bears the burden ahead of Wednesday’s RBNZ.
In doing so, the quote ignores the recently released New Zealand’s (NZ) ANZ Truckometer data for January, not to forget the Aussie Roy Morgan weekly consumer confidence. While the early signal to NZ economic activity rose 4.8% versus December month’s -2.5% mark, Australia’s consumer sentiment gauge slipped to 107.8 from 108.5 for the week ending February 09.
China’s coronavirus continues to haunt the commodity-linked currencies while also weighing on the market’s risk-tone. In its latest update, the Chinese Health Commission said the epidemic has already crossed 1,000 mark as far as the people died are concerned.
During the previous day, China’s January month CPI surged with the fastest pace since October 2011 to 5.4% while beating a 4.9% YoY forecast.
Moving on, the Australian housing and National Australia Bank’s Business Conditions/Confidence are likely to offer intermediate moves. However, major attention will be given to coronavirus updates and RBNZ.
Considering the aforementioned catalysts, TD Securities came up with the bullish call for AUD/NZD while saying, "New Zealand dollar (NZD) remains starved of foreign capital flows. Meanwhile, the Australian dollar (AUD) has benefited from an LNG boom that has helped to push a trade surplus. Notwithstanding a temporary shock from the virus, this offers AUD a competitive advantage over NZD, especially as the latter runs rich on our long-term valuation models. We will look to buy AUD/NZD on a dip towards 1.0350/1.0400. The 200-DMA at 1.0555 will be the gateway to a larger move towards 1.08/1.09."
Technical Analysis
A confluence of 100 and 200-day SMA near 1.0550 becomes the key upside barrier whereas 50-day SMA around 1.0400 can act as the immediate support.
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.
