AUDNZD has been trending lower on its 1-hour time frame, moving below a descending trend line. Price has pulled up from lows around the 1.0450 minor psychological support and is making a correction to the trend line.
This resistance area lines up with the 61.8% Fibonacci retracement level and a short-term area of interest. It also coincides with the dynamic inflection point at the 100 SMA, adding to its strength as a ceiling. Also, the 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside.
RSI seems to be turning lower even without reaching the overbought zone. Stochastic is just indicating overbought conditions but hasn’t crossed lower yet. A move lower by both oscillators could be enough to confirm that sellers are regaining the upper hand and could push price back down to the previous lows or much lower.
The RBA decided to cut interest rates by 0.25% earlier this week. This was in line with market expectations, which was probably why the Australian dollar managed to stay afloat after the announcement.
Meanwhile the GDT auction in New Zealand showed a 6.6% gain in dairy prices, possibly leading to some support for the Kiwi later on. The ANZ commodity prices report showed a 2.0% increase in prices, following the previous 3.7% gain.
However, the RBNZ has yet to make its monetary policy decision next week and might also be looking to cut rates, especially since it is considering making adjustments in the housing sector. Still, data form New Zealand hasn’t been as downbeat compared to the rest of the major economies so the central bank could still afford to keep rates unchanged for the time being.