- The AUD/NZD saw a significant rise to 1.1090, reaching multi-year highs.
- The RBNZ kept rates steady at 5.5%, signaling a willingness to ease monetary policy sooner rather than later.
- Policy differences between the RBA and RBNZ could support the AUD.
On Wednesday, the AUD/NZD rose to a new 2022 high, in reaction to the Reserve Bank of New Zealand (RBNZ) decision.
The RBNZ, as expected, kept the OCR anchored at 5.50%, but hinted at possible rate cuts in the near future. The RBNZ highlighted signs of easing inflation persistence and the expectation that headline CPI will return to its target in the second half of the year. It also addressed the impact of restrictive policy measures on the economy and deviated from the May 22 meeting where Governor Orr confessed that a hike was a “real consideration.”
Following the decision, a rate cut is now expected in October, with the market assigning almost a 60% probability of an early cut in August. On the other hand, as the Reserve Bank of Australia (RBA) seriously considers a hike, the pair could see further gains.
AUD/NZD Technical Analysis
In the near term, the AUD/NZD maintains bullish momentum due to the recent rally, but overbought conditions seen on the RSI and MACD indicate that a correction may be imminent.
Support levels have moved and now lie at 1.1050, 1.1000 and 1.0950. The next challenge for buyers is to reach and hold the target point of 1.1100.
AUD/NZD Daily Chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
