AUDNZD had a downside sell-off after reaching the 5-year-long resistance zone. 1.1140-1.1240 zone was the key resistance throughout 2017 and 2018. This resistance was tested recently and after that, the price starts to fall.
China’s slowdown because of the covid restrictions is taking a toll on its economy. AUD starts to take a hit from slowing China and slowing metal prices like copper and iron. On the other hand, the Reserve Bank of New Zealand continues its rate hikes. At the last meeting, another 50 basis point hike support the NZD from falling further.
The uptrend that started in the last quarter of 2021 is still ongoing. But the shorter-term trend channel broke to the downside recently and might be signaling further down moves. If the price holds below 1.1080, down moves might extend to the lower line of the trend channel which is close to 1.08 at the moment. Below that trend is another story for the parity.
Over the 1.1080, the strong resistance zone will be tested but it may need more fundamental support to break this zone.
