Short

AUD/NZD Retests Resistance Ahead of RBA Rate Decision

Updated

The AUD/NZD currency pair has recently broken through a key support level and is now being retested as a resistance level. This development comes just before the RBA interest rate decision, which is expected to result in a 25-point increase. However, traders should keep an eye out for signs that the central bank is taking a more dovish stance or downplaying the current terminal rate, which could put downside pressure on the AUD.

In light of recent negative economic data for the AUD, a shift away from a hawkish stance could exacerbate this downward trend. From a technical standpoint, if the AUD/NZD breaks below 1.0855 and maintains this level, it could be a good opportunity to sell this currency pair.

Note

Taking partial profits and moving to break even.

Note

As expected, the RBA increased interest rates by 25 points. However, the central bank slightly eased its rhetoric, changing its language from "The board expects further rate increases" to "The board expects further tightening of monetary policy." Additionally, the RBA noted that inflation appears to have peaked. These comments were interpreted as a less hawkish stance, resulting in some downward pressure on the AUD.

Note

Target 1 Hit

Trade closed: target reached

Target 2 Hit

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