- The RBA’s hawkish surprise joins early-day releases of upbeat Aussie data.
- RBNZ will be in the spotlight with GDT price index likely offering intermediate moves.
The AUD/NZD pair rallied more than 70 pips to 1.0640 ahead of the European open Tuesday after the RBA surprised Aussie bulls with no interest rate cut.
The Reserve Bank of Australia (RBA) refrained from meeting the broad market consensus of a 25 basis points (bps) reduction into the benchmark cash rate in its latest monetary policy announcement.
However, the central bank didn’t avoid mentioning downside risks to the economy while seeing further spare capacity. It was also conveyed in the rate statement that further labor market strength is required to reach the inflation target.
Traders considered the RBA’s action as a hawkish sign and piled their Aussie longs across the board.
Ahead of the RBA, upbeat retail sales and trade balance from Australia confronted a tad lower inflation expectations number from New Zealand.
Next up in the radar will be a fortnight release of New Zealand’s GDT price index ahead of the crucial monetary policy meeting by the Reserve bank of New Zealand (RBNZ). While the price measure might decline -1.1% versus +0.5% latest growth, views concerning the RBNZ’s move are quite mixed after a recent surprise from the RBA.
It should also be noted that the developments concerning a trade deal between the US and China will also be in the limelight considering the fact that China is one the largest customers to both Australia and New Zealand.
Technical Analysis
Having cleared 1.0630 resistance (now support), 200-day simple moving average (SMA) level of 1.0665 gain the immediate attention of the bulls ahead of targeting 1.0700 and April month high near 1.0730.
Meanwhile, pair’s slip beneath 1.0630 can revisit 1.0600 whereas 1.0540/30 region including multiple tops/bottoms since mid-February might attract sellers than after.
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