- AUD/NZD updates monthly low after RBNZ’s 50 basis point rate hike.
- The clear break of the 100 DMA and the rising trend line from the end of May favors the sellers.
- The bulls need validation of a fifteen day resistance line to regain control.
The AUD/NZD is on slippery ground after the Reserve Bank of New Zealand (RBNZ) announced a 50 basis point (bp) rate hike during the Asian session on Wednesday. The pair has dropped 75 pips to a daily low of 1.0989.
The RBNZ matched expectations for a 50 basis point rate hike to 3.0%, but the optimism from the quarterly Monetary Policy Statement seems to have favored AUD/NZD bears afterwards.
In addition to the RBNZ-driven moves, the pair’s latest weakness could also be related to the clear break below the confluence of 1.1000 support, now resistance, comprising the 100 DMA and a rising resistance line from end of May.
With this, AUD/NZD price becomes vulnerable to test the May lows around 1.0920. However, the 38.2% fibonacci retracement of the March-Aug high near 1.0965 could offer immediate direction for the pair.
Meanwhile, recovery remains difficult until the 1.1000 mark is broken. Still, the falling resistance line from late July at 1.1080 could challenge AUD/NZD bulls.
Should the pair’s prices hold firm beyond 1.1080, the possibility of seeing a rally towards the monthly high around 1.1180 cannot be ruled out.
AUD/NZD: Daily Chart
Trend: further weakness expected
Source: Fx Street
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