The AUD/NZD pair rose to multi-year highs at 1.1090 after the RBNZ decided to keep interest rates at 5.5% but hinted at potential rate cuts in the near future. This decision by the RBNZ has led to a policy discrepancy between the RBA and RBNZ, favoring the Australian dollar. The market now prices in a rate cut by October, with a 60% chance of an earlier cut in August. On the other hand, the RBA is considering a rate hike, which could lead to further upside for the AUD/NZD pair.
In terms of technical analysis, the AUD/NZD pair is currently maintaining a bullish momentum in the short term due to the recent rally. However, overbought conditions in both the RSI and MACD indicators suggest that a correction may be on the horizon. Support levels for the pair are now at 1.1050, 1.1000, and 1.0950, with the next target point for buyers being 1.1100. Traders will need to monitor these levels closely to gauge the future direction of the pair.
Overall, the RBNZ’s decision to keep rates steady but hint at potential cuts has led to a rise in the AUD/NZD pair. The market is now pricing in rate cuts by October, with a possibility of an earlier cut in August. This policy discrepancy between the RBA and RBNZ could favor the Australian dollar in the near term. Traders will need to keep an eye on key support and resistance levels to determine the next move for the pair.
