CPI from Australian remains strong and in target for the RBA. There has also been successive strong data prints with the latest employment data which missed on the headline change with only 300 jobs added vs 10,000 expected. However, nearly 16,000 full-time jobs were added and the unemployment rate dropped to 5.8% below expected 6.0%. New Zealand has seen a string of poor data which has kept the RBNZ's dovish stance.
A reverse formation is forming with a break to the upside confirming the pattern. There is not upside target at the moment so the approach here will be to monitor the divergence for any change. I have placed a tight stop at 1.0900 which is 3 x ATR.
With both pairs being correlated to commodity performance the risk of the volatile oil market have been taken out. The main risk would be a poor run of data from Australia and a turn around to the upside for New Zealand.