AUD/NZD Price Analysis — October 26

AUD/NZD Price Analysis — October 26

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 – 4-Hour Chart

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.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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AUD/NZD Price Analysis — October 19

AUD/NZD Price Analysis — October 19

The AUD/NZD traded through the Monday on a bearish bias, as the pair continued on its descent from last week. The bearishness can be largely attributed to the weakness in the Aussie (AUD) as a result of a recent RBA announcement.

The commodity-related currency dropped across the board after RBA Governor Philip Lowe glossed over the possibility of a rate cut next month. Lowe stated that additional monetary easing would bolster job growth and reduce the pressure bedeviling the currency. The governor hinted that rates could be reduced to a record low of 0.1%.

Meanwhile, the recent announcement that China has placed a ban on Australian coal imports has exerted additional pressure on the Aussie.

In other news, the Kiwi (NZD) has also been exhibiting bearish tendencies over the past few hours. However, prospects of a negative rate should bolster the currency, even though there might be little flow impact from a change in the policy rate. Foreign holdings of the country’s government bonds have increased by NZ$3 billion since May 2020, despite the growing expectations of a negative rate and the yield curve lagging behind its pairs.

That said, the Kiwi appears to have the upper hand despite serious weakness in both currencies.

AUD/NZD – 4-Hour Chart

AUD/NZD Value Forecast — October 19

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 resumed on its bearish momentum today, given the current market sentiment. Meanwhile, the pair continues to trade nicely within our descending channel as traders eye the 1.0600 support, which is also the base of our channel, making that level strong support. 

In the meantime, the bearish bias will remain as long as the AUD/NZD continues trading within this channel.

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Australian Dollar Dwindles on Anticipated RBA Rate Cuts, Risk Bias Softens

Australian Dollar Dwindles on Anticipated RBA Rate Cuts, Risk Bias Softens

The Australian dollar fell broadly today after the RBA hinted at further monetary easing next month. This is also exacerbated by ambiguous job data as well as weaker attitudes towards risk. Now it looks like US policymakers won’t agree to a new stimulus deal ahead of the elections.

US stocks have struggled to break record highs while Asian markets are also weakening. Today the euro is stronger, followed by the Swiss franc. For the week, the yen and dollar are now the strongest, while the Australian and euro are the weakest.

Technically, the Aussie is starting to look vulnerable as AUD/CAD appears to decisively break the 0.9409 support. This will confirm the beginning of the correction for growth from 0.8066 to 0.9696 with a target of 38.2% recovery.

After some unexpected volatility, AUD/NZD should also resume its corrective fall from 1.1043 to 1.0565 support. Support at 0.7095 on AUD/USD will be seen to confirm a return in short-term bearish sentiment. But the big level will be the resistance at 1.6586 on EUR/AUD.
RBA Lowe Suggests a Rate Cut in November
RBA Governor Philip Lowe hinted in his speech that the central bank is ready to further ease monetary policy at an upcoming meeting in November. He noted that “as the economy opens up, it is reasonable to expect that further monetary easing will receive more support than there was before.”

Lowe also noted that considerations of financial stability “have changed somewhat.” To the extent that monetary easing helps people get jobs, it will help improve private sector balance sheets and reduce problem loans. In this way, risks to financial stability can be reduced. “

Lowe’s comments are in line with market expectations for another cash rate cut to 0.10%, with increased asset purchases over longer maturities.

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AUD/NZD Price Analysis — October 12

AUD/NZD Price Analysis — October 12

Earlier today, the bearish momentum surrounding the Chinese yuan picked up following the decision of the People’s Bank of China (PBoC) to reduce its FX risk reserve ratio to zero. This sparked some serious bearishness around the AUD, considering the ties of the Australian economy and China.

 Furthermore, Gold (XAU/USD) stalled through most of today following a strong rally last week, which extended further weakness to the Aussie. 

Meanwhile, the Reserve Bank of New Zealand has been intentional with its forward guidance, which is considered to be a rare event, given the common approach towards forwarding guidance by other central banks around the world. 

Statements from the RBNZ Chief Economist Yuong Ha last week were unexpectedly dovish, as he stated the central bank should “do too much too soon than too little too late.” As regards negative interest rates, the Chief Economist asserted that the RBNZ was considering a tiering regime. 

As a result of the announcement, the NZD has also become very weak despite the blooming risk-on mood across markets. That said, the Kiwi is now trading poorly against other major currencies, including the AUD. 

Additionally, the recent development with the PBoC also extended some weaknesses to the NZD. 

AUDNZD – 4-Hour Chart

AUD/NZD Value Forecast — October 12

AUD/NZD Major Bias: Sideways

Supply Levels: 1.0900, 1.0934, and 1.1000

Demand Levels: 1.0800, 1.0725, and 1.0700

The AUD/NZD has traded throughout today without any identifiable bias. Today’s session was an endless tug-of-war between both currencies, which are currently heavily battered by their respective fundamental conditions. 

In the drawn-out consolidation, this pair slid a little bit but was immediately caught by the 50-day SMA on our 4-hour chart, indicating that the level will continue to support the AUD/NZD in the meantime. This also indicates that the pair is in favor of the upside, which means that we could see a bullish continuation when volatility returns. 

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AUD/NZD Price Analysis — October 5

AUD/NZD Price Analysis — October 5

The AUD/NZD spiked significantly from under 1.0600 in late July to tops above 1.1000 in August. In September, the pair experienced a major retracement, which sent it to the 0.0717 September low two weeks ago. 

Throughout the last week, this pair has managed to rebound higher to the 1.0850 level. However, economists at Westpac (an Australian bank and financial service provider) have predicted that a pullback to the 1.0700 could emerge in the near-term. They added that significantly more swings will occur through Q4, considering the current situation with the COVID-19 pandemic and the upcoming US Presidential Elections. They believe that this could take the AUD/NZD to the 1.1200 area. 

They explained that some of the pullbacks in the AUD/NZD are mainly as a result of the Aussie’s sensitivity to the global risk sentiment. They added that the relationship between the equity markets and the AUD/NZD is usually fluid, but has taken a turn this year as the AUD seems to have become the preferred proxy for risk since March. 

Furthermore, Westpac expects a cheap bank funding scheme to be announced in the Reserve Bank of Australia’s (RBA) meeting in November. This would further bolster the AUD and push the AUD/NZD above the 1.1200 area by the end of the year. 

AUDNZD – 4-Hour Chart

AUD/NZD Value Forecast — October 5

AUD/NZD Major Bias: Sideways

Supply Levels: 1.0844, 1.0900, and 1.0934

Demand Levels: 1.0725, 1.0700, and 1.0664

Technically, the AUD/NZD has been trading under intense bearish pressure. The pair appears to have been trading within a strong downward-facing channel—a deviation from the 6-month-old major bullish channel.

Currently, there’s a confluence of resistance at the 1.0830-44 region. This pair would have to defeat that level to break out of the bearish channel and into the bullish channel before it can reclaim a bullish standing. Failure to do so could extend the AUD/NZD journey downwards, below the 1.0725 strong support. 

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AUD/NZD Price Analysis — September 28

AUD/NZD Price Analysis — September 28

Over the past week, the G10 currencies have been heavily stirred, following a corrective move in the US dollar (DXY). This correction has been the major driver behind the price dynamics in the FX market of late.

Meanwhile, the Australian Dollar (AUD) has been one of the major underperformers, and not just as a result of the USD Price action, but also as a result of the repricing in the Reserve Bank of Australia (RBA), ahead of its October 6 meeting.

Dovish comments from RBA Deputy Governor Debelle about exploring several monetary options disposed to the bank has sparked worries that the cash rate could be lowered by 10 base-points, alongside a cut-down in the 3-year yield curve target. As a result, several traders have now set their focus on the 1.0700 psychological area.

Furthermore, the RBA is set to ease its monetary policy, while the Reserve Bank of New Zealand (RBNZ) remains unchanged for the time being. A relaxation in both the RBA and RBNZ monetary policies, ahead of the October RBA meeting, could put the AUD/NZD in a very precarious situation and could open the pair up to the 1.0600 support.

AUDNZD – 4-Hour Chart

AUD/NZD Value Forecast — September 28

AUD/NZD Major Bias: Bearish

Supply Levels: 1.0800, 1.0844, and 1.0934

Demand Levels: 1.0725, 1.0700, and 1.0664

The AUD/NZD appears to be charging towards the 1.0800 resistance following an easing in the greenback’s bullishness. However, this rally might not last considering the confluence of resistance at the 1.0800 level. Meanwhile, a bearish channel has emerged on our 4-hour chart, indicating that this corrective move in the AUD/NZD might come to an end soon.

That said, it would be interesting to see how this pair reacts with that level in the near-term.

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AUD/NZD Price Analysis: September 21

AUD/NZD Price Analysis: September 21

The AUD/NZD traded on a depressing sentiment through the first four sessions last week, before finding some reprieve on Friday, after breaking below the key 1.0800 psychological line. At press time, the pair appears to have regained its footing above the psychological level at 1.0822.

On Friday, the Finance Minister of New Zealand, Grant Robertson, stated that the Reserve Bank of New Zealand (RBNZ) isn’t inclined to adjust its policy rate until March. The Minister also mentioned that a stronger-than-expected economic recovery would help the RBNZ stay put for the near-term.

The hawkish stance by the RBNZ has bolstered the strength of the NZD against other major rival currencies. The NZD/USD has climbed to its highest point since April of 2019 on Friday at 0.6798.

Meanwhile, reports from Australia last week showed that the Unemployment rate in August fell to 6.8% from 7.5% in July, indicating a goodish recovery in the economy. However, this positive data has failed to have a lasting effect on the AUD.

AUD/NZD – 4-Hour Chart

AUD/NZD Value Forecast — September 21

AUD/NZD Major Bias: Bullish

Supply Levels: 1.0844, 1.0900, and 1.0934

Demand Levels: 1.0800, 1.0768, and 1.0725

The AUD/NZD has bounced off our ascending channel and is now approaching the 1.0844 resistance level. We expect the base of our channel to support any fall from this level strongly, making further upside correction very likely in the near-term.

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