AUD/NZD Price Analysis — October 26

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The AUD/NZD continued on its bearish momentum on Monday, as both currencies exhibit unclear biases as the USD (DXY) waxes stronger. The pair recorded a new 3-month low around 1.0637 in the early European session today.

Earlier today reports from Australia illustrated that the country recorded better-than-expected trade surplus data. However, this positive development failed to influence the Aussie’s valuation against other major currencies.

Meanwhile, traders will be looking forward to the speeches from the Reserve Bank of Australia’s Deputy Governor Guy Debelle and Assistant Governor Michele Bullock in the early Asian session tomorrow. Investors expect the RBA to implement a rate cut in November and any comments from tomorrow’s meeting confirming that decision could cause the AUD to drop in value even further.

The RBA has kept its interest rate at a record low of 0.25% since the emergency 50 bps cut in March. Economists have widely predicted that the bank will cut its rate even lower at its November policy meeting to 0.1%.

This, coupled with bond-buying outside the yield curve should be bad for the Aussie’s value rating across the board. Purchasing long-dated bonds is a reliable way for central bank policymakers to reduce funding costs.

In other news, the Trade Balance data release from New Zealand tomorrow is likely to determine the near-term price action of the Kiwi, amid the political tensions in the United States.

AUD/NZD Value Forecast — October 26

AUD/NZD Major Bias: Bearish

Supply Levels: 1.0725, 1.0800, and 1.0844

Demand Levels: 1.0600, 1.0550, and 1.0500

The AUD/NZD remains in a race to the bottom of our descending channel around 1.0550. Given the current sentiment surrounding the AUD, we expect this pair to fall further in the near-term.

That said, a bullish reversal from this level will likely be cut short by the strong resistance at 1.0725. Regardless, the overall bias of the AUD/NZD remains strongly to the downside.

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