AUD/NZD slides to 1.0950 area after RBA decision, holds above 200-day SMA

The AUD/NZD cross attracts fresh sellers following an Asian session uptick to the 1.1000 psychological mark and drops to a fresh daily low after the Reserve Bank of Australia (RBA) announced its policy decision. Spot prices currently trade around mid-1.0900s, within striking distance of over a two-month low touched on Monday, though manage to hold above the very important 200-day Simple Moving Average (SMA) pivotal support.

The Australian central bank, as was widely expected, decided to maintain the status quo for the ninth straight meeting and left the Official Cash Rate (OCR) unchanged at 4.35% following its December policy meeting. In the accompanying statement, the RBA noted that the board is gaining some confidence that inflationary pressures are declining in line with their forecasts. This reaffirms bets for an early rate cut and turns out to be a key factor exerting pressure on the Australian Dollar (AUD) and the AUD/NZD cross. 

Meanwhile, government data released earlier this Tuesday showed that China’s Trade Balance unexpectedly grew to $97.44 billion in November from $95.27 billion in the prior month. This, however, was offset by the disappointing readings on exports and imports, which pointed to still sluggish overseas and local demand. Apart from this, worries about US President-elect Donald Trump's impending tariffs further dent demand for the China-proxy Aussie and contribute to the AUD/NZD pair's intraday slide.

That said, bets for aggressive policy easing by the Reserve Bank of New Zealand (RBNZ) might hold back traders from placing aggressive bullish bets around the New Zealand Dollar (NZD) and help limit losses for the AUD/NZD cross. This, in turn, makes it prudent to wait for some follow-through selling below a technically significant 200-day SMA before positioning for an extension of the recent decline witnessed over the past two weeks or so. Traders now look to the post-meeting presser for a fresh impetus.