The AUD/NZD exchange rate continued its bullish trend this week. The price jumped to a high of 1.1238, which was the highest point since August 2017. It has rallied by almost 10% from its lowest level this year as the Australian dollar outperforms the kiwi.
RBNZ and RBA hikes
The AUD to NZD exchange rate continued rallying even as the Reserve Bank of Australia (RBA) and the Reserve Bank of New Zealand (RBNZ) sentiment converged. The two central banks continued hiking interest rates in a bid to fight the soaring inflation. In a statement on Friday, RBNZ’s Adrian Orr reiterated that the bank will keep rising interest rates in the coming meetings.
Last week, the bank decided to hike interest rates to 3% and hinted that the official cash rate will soar to 4%. This makes it one of the most hawkish central banks in the world. Data published on Thursday showed that the country’s retail sales dropped by 2.3% in the second quarter, signaling that the high interest rates were having an impact on the economy.
Meanwhile, the AUD/NZD price rose ahead of the upcoming interest rate decision by the Reserve Bank of Australia. The bank is expected to hike interest rates again in this meeting.
AUD/NZD forecast
The four-hour chart shows that the Aussie to kiwi exchange rate has been in a strong bullish trend in the past few weeks. As it rose, the pair crossed the important resistance point at 1.1181, which was the highest point on July 28. It was also the highest level this year.
The AUD/NZD price rose above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has continued rising. It is now at the overbought level. Therefore, the pair will likely continue rising as bulls target the next key resistance level at 1.1300. A drop below the suppor at 1.1200 will invalidate the bullish view.
