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12 Jun 2014
AUD/NZD hammered to 1.0850, hawkish RBNZ weighs
FXStreet (Bali) - The AUD/NZD is selling hard in Asia, currently testing bids at the next support area of 1.0850/60, after 1.09 got broken.
The combination of a rate hike by the RBNZ to 3.25% was accompanied by a hawkish statement from Governor Wheeler, who said "the speed and extent to which the OCR will need to rise will depend on future economic and financial data, and its implications for inflationary pressures."
Since Wheeler also said that inflation pressures continue and that the New Zealand’s economic expansion has considerable momentum, noting that "GDP is estimated to have grown by around 4 percent in the year to June", traders are starting to price in another potential rate hike in July.
In terms of technical analysis, the break below 1.09 support is a first important blow for those long the pair, however, the lower highs and higher highs structure from the daily is still unperturbed, thus it will be important to now defend 1.0850/60 support, or otherwise, further selling could accelerate allowing 1.08 ahead of 1.0750 (last swing low on the daily).
Focus is now on the Australian jobs report, due at 1.30 GMT.
The combination of a rate hike by the RBNZ to 3.25% was accompanied by a hawkish statement from Governor Wheeler, who said "the speed and extent to which the OCR will need to rise will depend on future economic and financial data, and its implications for inflationary pressures."
Since Wheeler also said that inflation pressures continue and that the New Zealand’s economic expansion has considerable momentum, noting that "GDP is estimated to have grown by around 4 percent in the year to June", traders are starting to price in another potential rate hike in July.
In terms of technical analysis, the break below 1.09 support is a first important blow for those long the pair, however, the lower highs and higher highs structure from the daily is still unperturbed, thus it will be important to now defend 1.0850/60 support, or otherwise, further selling could accelerate allowing 1.08 ahead of 1.0750 (last swing low on the daily).
Focus is now on the Australian jobs report, due at 1.30 GMT.