The AUDNZD has given up last week’s rally as the pair awaits the latest RBNZ rates decision. The Aussie dollar had been boosted last week, despite the RBA slashing rates to a record low of 0.1%.
Last week’s rally in the Aussie had traders scratching their head as it was counter-intuitive to the usual central bank releases, where additional stimulus and rate cuts are met with selling. It seems that this happened in the AUDNZD with a delayed reaction and the Kiwi dollar is on the front foot ahead of the Reserve Bank of New Zealand meeting tomorrow. Traders are expecting the bank and its Governor Adrian Orr to hold interest rates steady at 0.25% but the bank are set to unveil a new Funding for Lending package.
The new lending program will seek to provide cheap loans to banks in order to stimulate the lending to businesses and some analysts are seeing this as a prelude to a move to negative interest rates next year if required. The central bank is also expected to hold its current bond-purchase program at NZ$100 billion.
Tomorrow also sees the release of Westpac’s Australian consumer confidence figures with a reading of 105 expected. The survey is done over 1200 Australian households and the data may see a small move in the AUDNZD pair but traders will wait for the RBNZ which is scheduled for an hour and a half later.
AUDNZD Technical Outlook
The AUDNZD had rallied to test the 1.0750 resistance but a failure there has seen a sell-off. back into the range. The price ation would favour the downside and traders could go short with a stop near 1.0740 and a target of 1.0500 for a roughly 2:1 risk/reward trade. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
AUDNZD Daily Chart