AUDNZD is in a tightening zone since 2013 and trying to get support from the 1.025 and make a move to higher levels ahead of the RBNZ decision. The economy is getting stronger in New Zealand. The unemployment announced much better than expected and fall to %3.4 while the inflation is running hotter. At the same time, the largest city, Auckland’s vaccination target for reopening %90 is soon to be reached. With the reopening of Auckland, the employment market might continue to get better which will support the high inflation rates as well.
Tomorrow, a 25 bp rate hike is expected from RBNZ but because of the much better than expected employment and higher than expected CPI data, RBZD may want to go a front-loaded rate hike of 50bp.
In the short to medium term, AUDNZD is testing the upper line of the bearish trend channel. In case of a 50 bp rate hike, AUDNZD may stay inside of the bearish channel and fall to 1.025 gradually. On the other hand, a breakout to the upside may cause bullish pressures to the 1.05-1.0540 zone. The key pivot level is 1.0430 at the moment for future direction.
