AUDNZD to New Lows?

AUDNZD to New Lows?

AUDNZD to New Lows?

For the past few weeks we have seen AUDNZD gradually move lower and today, it broke a brief consolidation to trade at its lowest level in nearly 8 weeks. Very little Australian and New Zealand data was released this week and the few reports that out should have actually driven the currency pair higher (Australian building permits rose sharply while NZ permits tumbled). That changes tonight with Australian retail sales, manufacturing PMI and Chinese data scheduled for release. Judging from the price action of the currency investors fear that the numbers will be weak but the main reason for AUD’s underperformance versus NZD is central bank policy. RBNZ Assistant Governor McDermott suggested yesterday that they are not eager to lower rates again because the housing market is overvalued and NZ is doing better relative to rest of world. The only thing we’ve heard from the RBA on the other hand is that they are worried about the strong level of the currency.

Technically, there’s no support in AUDNZD now until the July low of 1.0320. If that is broken then we could see 1.01 easily. Resistance is at the breakdown point of 1.04 but the more significant level to watch is 1.0530, which is where the 20 and 50-day SMA converge.

Chart Of The Day

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