AUD/NZD - Steering away from key levels? - Rabobank

Eren Sengezer FXStreet

"AUD/NZD this morning steered away from breaking through key technical resistance. The currency pair has been in a downtrend since late October – a move which was triggered by a round of short-covering in the NZD," Rabobank analysts note.

Key quotes

Currently trend-line resistance in the AUD/NZD1.10 area is being underpinned by both the 50 and 100 day simple moving averages which are also coming in close to the 1.1000 level. Without out a doubt this is a tough resistence area.

That said, in our view whether or not the AUD/USD eventually manages to break above this trend-line resistance with depend on fundamental developments and we see a good chance that the NZD will lose ground. The tone of the RBA and RBNZ at their policy meetings on Feb 6 and Feb 7 respectively could be instrumental in setting to scene for AUD/NZD in the coming weeks.

While we do expect either to rush into hiking interest rates, the first meeting of the RBNZ with Governor Orr at the helm could re-set the more optimistic projections which has been supporting the NZD since the end of last year.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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