- NZ trade balance does little to support NZD materially.
- However, 200 4-hour moving and 21-day moving averages weigh.
AUD/NZD remains on the backfoot and the latest data supports an upside bias in the Kiwi. Both the Aussie and Kiwi have garnered strength from trade-deal traction and a general risk-on tone although there are still plenty of potential road bumps along the way.
Trump insists that all is going to plan and has been quite vocal about it – The US and China aim to sign into a contract in November in Chile when they meet, and this will hopefully be making way and allowing for negotiations for a phase-2 deal to take place.
Central bank outlook
Meanwhile, from a central bank perspective, “Australian 3yr government bond yields fell from 0.79% to 0.76%, the 10yr yield from 1.18% to 1.13%. Markets are pricing 5bp of easing at the 5 Nov RBA meeting, and a terminal rate of 0.50% (RBA cash rate currently at 0.75%). Market pricing for RBNZ is for 21bp of easing on 13 November, with a terminal rate of 0.67%,” analysts at Westpac explained.
AUD/NZD levels
On a technical basis, the 200 4-hour moving average, as well as the 50 and the 21-day moving averages are a roadblock for the bulls aiming for a close above the 1.07 figure. Bears will be looking for a move to the 1.0630s and the 38.2% Fibonacci retracement located around 1.0620.
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