AUDNZD has risen more than 3.50% since late February with slow negative growth in New Zealand and rapidly decreasing consumer and business confidence. The RBNZ still sees rates staying higher until the end of the year, with only four cuts expected in the next two years, while markets fear a possible hard landing. These expectations have pushed AUDNZD higher at a fast pace in the last few weeks. Markets will be watching for any dovish surprises tomorrow.
(AUDNZD Daily Chart)
Now, AUDNZD has reached a critical point. The 1.0930-1.0980 zone might create a very strong resistance, as many resistance points have converged in this zone. A horizontal resistance that has kept upward moves limited for exactly one year, with only two weeks of exception, the middle point of the 2022 fast fall, and the slightly negatively sloped trend channel since February 2023, all converge at this zone. A breakout might change the trajectory, but until that happens, Kiwi bears should tread with care.
The 13-day moving average can be followed as the first sign of a possible reversal. One or two closes below it might be an early signal of a reversal or a momentum shift. But if the 1.0930-1.0980 resistance breaks, the upward pressure might continue in the coming weeks.
