AUD/NZD holds support ahead of AU and NZ data
Technically, AUD/NZD looks ripe for another leg higher as it is holding above trend support and the 100-bar EMA. A break above the weekly pivot point could confirm such a breakout and resumption of its trend and bring the weekly R1 / recent highs, with 1.10 also making an interim target along the way.
However, keep in mind that data from AU and NZ between 11:30 AEDT and 12:00 could make or break this trend. Ideally, we’d need to see strong AU household spending, an okay (or better) business sentiment report alongside lower NZ inflation forecasts for this to simply break higher.
For now, the bias is for a break above the weekly pivot whilst prices remain above yesterday's low. A downside break of the trendline suggests a deeper pullback is underway.
However, keep in mind that data from AU and NZ between 11:30 AEDT and 12:00 could make or break this trend. Ideally, we’d need to see strong AU household spending, an okay (or better) business sentiment report alongside lower NZ inflation forecasts for this to simply break higher.
For now, the bias is for a break above the weekly pivot whilst prices remain above yesterday's low. A downside break of the trendline suggests a deeper pullback is underway.
Comment:
According to an RBNZ survey, 2 and 3-year inflation expectations fell which has helped AUD/NZD break above the weekly pivot. A bullish wedge on the 1-hour chart targets the highs around 1.1030.
Trade closed: target reached:
Nice move to the target before momentum reversed. It could move higher, it may move lower - but the reward to risk around current levels is less desirable, given resistance overhead.
Focus now switches to next week's RBNZ cash rate decision and AU wage report on Wednesday.
Focus now switches to next week's RBNZ cash rate decision and AU wage report on Wednesday.
