AUDNZD has been trending lower, moving inside a descending channel on its 4-hour time frame. Price is currently testing the resistance and could be due for a drop to support.
The 100 SMA is below the longer-term 200 SMA, confirming that the path of least resistance is to the downside. In addition, the longer-term 200 SMA coincides with the channel resistance to keep gains in check.
Stochastic is on its way down to show that selling pressure is present. This could be enough to take AUDNZD back to the channel support at the 1.8000 major psychological level.
Earlier today, Australia released a stronger than expected private sector credit figure of 0.5% versus the estimated 0.4% increase. There are no other reports due from Australia today, so market sentiment could stay in play.
As for New Zealand, there were no major reports out this week but the currency has been reeling from generally weaker dairy prices in the latest auctions. Still, the Kiwi was able to draw a boost from the announcement of the new RBNZ head.
Looking ahead, the potential rate differential between the two nations can come into play as traders adjust their policy biases. The RBA has shifted to a less dovish stance in their latest decision while the RBNZ has more or less maintained its neutral bias.
By Kate Curtis from Trader’s Way