AUD/NZD stays near three-month low after NZ trade balance, eyes on speech from RBNZ’s Orr

• AUD/NZD remains on the back foot after upbeat New Zealand (NZ) data.
• Traders will now look for RBNZ’s Orr’s speech for fresh clues.

AUD/NZD takes rounds to 1.0560, near to the three-month low of 1.30543 flashed the previous day, on early Asian session on Wednesday. The quote shows less reaction to the October month trade balance data from New Zealand ahead of another key event.

New Zealand’s October month Trade Balance slipped below $-1621M forecast and $-1319M (revised) prior on a monthly basis whereas the yearly figures recovered from $-5.33M to $-5.04M. Further, exports grew from $4.36B (revised) prior to $5.03B whereas Imports grew to $6.05B from $5.68B (revised).

The New Zealand dollar (NZD) shows a mild uptick to the data but refrained from a major move as markets await a speech from the Reserve Bank of New Zealand’s (RBNZ) Governor Adrian Orr who is to hold a press conference about the Financial Stability Report, in Wellington.

Comments from the Reserve Bank of Australia (RBA) Governor Philip Lowe couldn’t stop the AUD/NZD pair from declining to three month low. The RBA Governor said that quantitative easing would be considered if the cash rate fell to 0.25% but considered that scenario to be “extremely unlikely”. The reason could be the New Zealand dollar’s (NZD) broad strength after the RBNZ release of the bi-annual Financial Stability Review report.   The central bank left Loan to Value Ratio (LVR) unchanged, as expected, while praising the recent recovery in the housing market.

Technical Analysis

With the price dip below 50% Fibonacci retracement of October-November rise, August month low near 1.0830 will be the key to watch as it holds the gate for 61.8% Fibonacci retracement level of 1.0494. On the upside break of 1.0565 including 50% Fibonacci retracement, the quote could aim for 1.0630.