The AUD/NZD pair faced renewed selling pressure after briefly rising to the psychological 1.1000 mark during the Asian session on Tuesday. The cross dropped to a daily low near mid-1.0900s, edging closer to Monday’s two-month low, though it continues to hover above the pivotal 200-day Simple Moving Average (SMA) support.
RBA Holds Rates, Signals Easing Inflationary Pressures
The Reserve Bank of Australia (RBA) maintained its Official Cash Rate (OCR) at 4.35% during its December policy meeting, marking the ninth consecutive decision to keep rates unchanged. The central bank‘s statement highlighted growing confidence in easing inflationary pressures, aligning with market expectations for an early rate cut.
This dovish outlook weighed heavily on the Australian Dollar (AUD), driving the AUD/NZD cross lower.
China’s Mixed Trade Data Adds to AUD Weakness
China’s November trade balance showed an unexpected rise to $97.44 billion, up from $95.27 billion in October. However, subdued export and import figures indicated persistent weakness in both global and domestic demand. This, combined with concerns over impending tariffs from US President-elect Donald Trump, dampened sentiment for the China-proxy Australian Dollar.
RBNZ Outlook Limits NZD Upside
The New Zealand Dollar (NZD) found limited support as expectations for aggressive monetary easing by the Reserve Bank of New Zealand (RBNZ) capped bullish momentum. Speculation about potential rate cuts by the RBNZ tempered any significant gains for the Kiwi, offering slight relief for the AUD/NZD cross.
Technical Analysis: Key Levels to Watch
Support Levels:
The pair is holding above the 200-day SMA near 1.0940, a critical support level. A decisive break below this level could signal further declines toward the two-month low at 1.0920 and potentially the 1.0880 region.
Resistance Levels:
On the upside, immediate resistance is seen at 1.1000, followed by the 20-day Exponential Moving Average (EMA) near 1.1035. A sustained break above these levels could pave the way for a rebound toward 1.1100.
The Relative Strength Index (RSI) remains near 40, signaling continued bearish sentiment. The pair’s failure to hold above 1.1000 indicates potential for further downside if the 200-day SMA is breached.
Related Topics:
