aud/nzd

H4: Left Chart AUDNZD is overall bullish however, it is approaching a strong resistance zone in green and upper brown trendline so we will be looking for sell setups on lower timeframes. M30: Right Chart AUDNZD is forming a channel in red but the lower trendline is not valid yet, so we are waiting for a new swing low to form around it to consider it our trigger swing. (projection in purple) Trigger => Waiting for that swing low to form and then sell after a momentum candle close below it (gray zone) Meanwhile, until the sell is activated, AUDNZD can still trade higher. Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich

Summary: The US Dollar continues to rally in the wake of the U.S CPI report. GBP is likely to see currency value weaken in the future. Market participants expect to see some strength in the EUR. Is the AUD starting to lose momentum? Read next: (EUR/USD) German Inflation Meets Forecasts, Pound Sterling Continues To Weaken (EUR/GBP, GBP/USD), (EUR/JPY) Japanese Yen Strengthens As Investors Seek Safe-Haven Assets - Good Morning Forex!  The US Dollar continues to strengthen against the EUR   The market is signalling bearish market sentiment for the EUR/USD currency pair. During early trading on Thursday the US Dollar strengthened to a two-decade high after U.S inflation remained high. The U.S CPI report revealed that although inflation could likely have reached its peak, it is still high and the Fed’s current aggressive tightening of monetary policy is likely to remain aggressive. This is causing the US Dollar to strengthen even further against the EURO. EUR/USD Price Chart Pound Sterling is likely to continue to weaken. The market sentiment for this currency pair is showing bullish signals. However, during early trading on Thursday the price of this currency pair has lost value. Going forward it is likely that the market will see a Pound Sterling that continues to weaken in the wake of rising prices and inflation. The combination of a government unwilling to help and an inflation-weary UK public are two factors that will contribute to the further weakening of the GBP. In addition, it is expected that the Pound Sterling is likely to fall further against the Euro and USD as the economic outlook in the UK deteriorates and prompts the Bank of England (BoE) to ease the rising interest rates. EUR/GBP Price Chart EUR expected to strengthen against CHF The market sentiment for this currency pair is showing bullish signals. Investors expect the EUR to strengthen against the CHF. Market participants expect the European Central Bank (ECB) to raise interest rates for the first time in more than 10 years in the summer. Whilst the Swiss National Bank (SNB) remains dovish in their fight against inflation. EUR/CHF Price Chart NZD strengthens slightly against the AUD After the National Australia Bank (NAB) increased their interest rates early in May, the AUD/NZD currency pair increased in value. The momentum for this move has somewhat slowed since then. However, the pair still seems to be showing volatility. AUD/NZD Price Chart Read next: (EUR/USD) Wall Street Tanks, Allowing the Euro To Slightly Recover, (EUR/GBP) Goldman Sachs Betting Against GBP, JPY Gets The Better Of The US Dollar And EUR - Good Morning Forex!  Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com

AUD/NZD continued to trade with a heavy downside bias amid growing policy divergence between the Reserve Bank of Australia and the Reserve Bank of New Zealand. Economists at OCBC Bank maintain a short bias targeting 1.12. Risks remained skewed to the downside “RBNZ’s accompanying MPS was slightly more hawkish than expected as it noted that the MPC considered 50, 75 bps at this meeting; core CPI is ‘too high’ and lower NZD if sustained poses further upside risk to CPI.” “We maintain our tactical short play on AUD/NZD, targeting 1.12, 1.1050 objectives.” “Daily momentum is bearish while RSI fell. Risks remained skewed to the downside.” “Support at 1.1240, 1.1210 levels.” “Resistance at 1.1305 (21 DMA), 1.1380 levels.”

Economist at UOB Group Lee Sue Ann reviews the latest interest rate decision by the RBNZ. Key Takeaways “As expected, the Reserve Bank of New Zealand (RBNZ) decided to raise its official cash rate (OCR) by 50bps again to 3.50%. This is the fifth consecutive month that the RBNZ has raised rates by 50bps.” “We see the RBNZ on track to continue hiking the OCR to 4.00% by the end of this year, as per our forecasts. Thereafter, we see the RBNZ on hold, as we are mindful that it will not want the economy to tip over into recession and for unemployment to rise sharply, as it aims to strike a balance with higher interest rates slowing the economy and inflation. House prices are plunging at a fast pace.” “Risks, however, remain skewed towards more rate hikes in 1Q23, and thus an OCR higher than 4%, before the RBNZ pauses in the current tightening cycle. We will be monitoring both local and global developments and reviewing our OCR trajectory if necessary. The next RBNZ meeting is on 23 Nov, and this will also be the last monetary policy meeting for 2022.”

NZD/USD is lower, sinking back to the mid-0.56s. Economists at Bank of America target the pair at 0.56 by year-end. NZD to underperform AUD “We revise down our end-2022 forecast for NZD/USD to 0.56 (previously 0.65) with recent developments making a return to the 0.60s unlikely in 2022. Poor global economic and financial conditions suggest a move below our year-end forecast is likely in the near term.” “We continue to expect NZD to underperform AUD, the latter better poised to benefit from China’s easing in commodity-intensive sectors.”  

On 4 October, the Reserve Bank of Australia (RBA) surprised the market with a smaller-than-expected rate hike of 25 bps. A day later, the Reserve Bank of New Zealand (RBNZ) delivered its fifth consecutive 50 bps hike. In the view of economists at HSBC, the recent dip in AUD/NZD is unlikely to be sustainable. Australia’s fundamentals look relatively stronger than New Zealand’s “With the dovish surprise from the RBA and the hawkish surprise from the RBNZ, the AUD weakened against the NZD, with AUD/NZD declining. However, we think AUD/NZD is likely to move higher, as Australia’s fundamentals look stronger than New Zealand’s on a relative basis, with fewer hard-landing risks and a stronger current account position.” “When compared to the ‘safe haven’ USD, both commodity currencies are likely to face further downside risk, amid vulnerable risk sentiment, higher US yields, and slowing global growth.”

First, let's take a look at the larger picture. The Aussie dollar has been under pressure from the Kiwi dollar since its long-term peak reached in November 1984 at 1.7637. It found a long-term low in April 2015 at 1.0050. All in all, it has been a 30-year decline. The rally out of the 2015 low hasn't been that impressive, but we think that more upside should be expected in the longer term and a move towards at least 1.2500 should be expected. Zooming in a bit, we can see that AUD/NZD has just hit strong resistance at 1.1439 where it has been rejected before and will likely need to gather some energy to be able to break clearly through this resistance. Therefore, we will be looking for a temporary corrective decline towards 1.0880 before the next run higher to try to break above resistance at 1.1439 for the expected rally towards 1.2500.   Relevance up to 07:00 2022-10-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/296634

AUD/NZD retreats from intraday high after RBA’s Interest Rate announcement. RBA announced a 0.25% rate hike while matching market forecasts. Strong NZ Building Permits previously dragged the quote to fresh multi-day low. RBA Governor’s speech, NZ jobs report and RBNZ’s Orr will be important to defend the buyers. AUD/NZD fails to extend the early Asian session rebound from a multi-day low as it drops back to 1.1000 after the Reserve Bank of Australia’s (RBA) monetary policy decision on Tuesday. RBA matches the broad expectations while easing the rate hike trajectory with the 25 basis points (bps) of a lift to the benchmark interest rate, to 2.85% at the latest. Also read: RBA announces another 25 bps OCR rate hike in November Earlier in the day, New Zealand’s seasonally adjusted Building Permits for September jumped by 3.8% versus -1.2% expected and -1.6% prior. The same should have drowned the AUD/NZD pair to the lowest levels since July 15 before the risk-on mood triggered the cross-currency pair’s recovery. That said, the market sentiment improves during early Tuesday as the US Treasury yields remain sluggish. The same allows the US equity futures to print mild gains amid hopes of easing energy prices, as well as inflation. The reason for the cautious optimism could be linked to the downbeat US data and comments from US President Joe Biden and Russian leader Vladimir Putin. On Monday, the US Chicago Purchasing Managers’ Index and Dallas Fed Manufacturing Business Index for October came in at 45.2 and -19.4 versus 47.0 and -15.0 expected respectively. “US President Joe Biden on Monday called on oil and gas companies to use their record profits to lower costs for Americans and increase production, or pay a higher tax rate, as he battles high pump prices with elections coming in a week,” said Reuters. On the other hand, Russia’s Putin said he can set up a gas hub in Turkey ‘quite quickly’ and was sure gas contracts will be signed. The Russian leader also added that there will be many in Europe who want to do so. Looking forward, a speech from RBA Governor Philip Lowe will act as an immediate catalyst for the AUD/NZD traders to watch. Following that, New Zealand’s quarterly employment numbers and comments from Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr will be crucial for the pair’s direction. Should the strong fundamentals surrounding New Zealand joins hawkish comments from RBNZ and firmer NZ jobs report, the pair has a further downside to track. Technical analysis Although the 200-DMA defends AUD/NZD bears around 1.1005, the pair’s recovery remains elusive unless staying comfortably beyond the support-turned-resistance line stretched from November 2021, around 1.1170 by the press time.

This week, the New Zealand dollar received substantial support from the Reserve Bank of New Zealand: the central bank fully justified the hawkish hopes of most experts by raising the interest rate by 75 basis points. And although the central bank implemented the base scenario, the kiwi still showed increased volatility. For instance, the NZD/USD pair updated its multi-week high to 0.6282. But in this case we cannot be sure about the success of the uptrend - the "dark horse" here is the greenback, which can significantly strengthen its positions ahead of the December FOMC meeting. That's why it is best to "monetize" the results of the RBNZ's November meeting with the help of cross-pairs that have the kiwi in it. And, in my opinion, the best option here is the AUD/NZD cross. Take a look at the weekly chart of this pair. The price has been falling steadily and consistently (though with corrective pullbacks) for the second month in a row, since early October. This means that we are dealing with a noticeable downtrend, which has a rather strong fundamental basis. It is expressed primarily (and mostly) in how the rates of the RBNZ and Reserve Bank of Australia are uncorrelated. The RBA slowed the pace of tightening back in September, complaining about the side effects of aggressive policy. And recently the RBA has been giving signals about a possible pause in the first half of next year. And although these signals are only heard in the list of hypothetical options, the market is still cautious. In my opinion, it is quite reasonable. Let's look back on the minutes of the last RBA meeting. The text of this document indicates that the central bank has no predetermined trajectory for the rate hike. Members of the central bank do not exclude two options: 1) a return to a 50 bps hike (the central bank is currently raising the rate in 25 bps); and 2) a suspension of monetary policy tightening. In my opinion, the Australian central bank will continue to raise the rate by 25 bps at the next meetings, but will end the current cycle of monetary tightening at a lower level relative to the RBNZ. The OCR rate is currently at a 14-year high (4.25%, RBA at 2.85%), with the New Zealand central bank still stating that "there is still a lot to do" as inflation remains at unacceptably high levels. At the previous (October) RBNZ meeting, the central bank raised the rate by 50 bps, as it did at the previous four meetings. However, at the final press conference, RBNZ Governor Adrian Orr admitted that 75 bps was among the options under consideration. At that time, the central bank was hesitant to accelerate monetary tightening, but the inflation data released a little later gave the RBNZ members determination in November. As a reminder, inflation in New Zealand soared again in the third quarter, well above forecast levels. The consumer price index rose 2.2% in quarterly terms (against a forecast of 1.5%) and jumped to 7.2% year over year, against a forecast of a slowdown to 6.5%. Given the inflation trends, as well as Orr's hawkish rhetoric, we can assume that the monetary policy tightening will continue to slow down next year. For example, currency strategists at the UOB have revised their earlier forecasts and moved the current cycle ceiling to 5.5%. In their view, the RBNZ will reach this target in the third quarter of 2023, after which the process of monetary policy tightening will be paused, followed by a rate cut in 2024. The RBA, for its part, is relaying softer language, while not ruling out dovish decisions. For example, at the end of its last meeting, RBA Governor Philip Lowe said that members of the central bank "considered it appropriate to raise rates at a slower pace." At the same time, he noted that the members discussed the implications and costs of not raising rates, since the central bank "takes into account the pressures of higher rates and inflation on household budgets." Thus, Lowe allowed a pause in the process of tightening monetary policy. Thus, the current fundamental background contributes to the further decline of the AUD/NZD cross-pair. The bearish scenario is also evidenced by the technical picture: the pair is between the middle and bottom lines of the Bollinger Bands indicator on the daily chart, as well as under all the lines of the Ichimoku indicator, which shows a bearish Parade of Lines signal. It is better to use any corrective surges to open short positions to the first support level of 1.0750 (the bottom line of the Bollinger Bands indicator on the daily chart). The main bearish target is 1.0700 (lower limit of the Kumo cloud on the one-week timeframe).       Relevance up to 01:00 2022-11-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328219

Summary:  Fed Chair Powell’s speech on the economy, inflation and the labor market yesterday only confirmed the market’s forward expectations for Fed policy. The lack of notable pushback from Powell on the market’s pricing of eventual Fed easing saw equity markets in a celebratory squeeze and the USD taken down a few notches as weak data prior to his speech added to the reaction and the drop in US treasury yields. But now that we have the binary reaction, cue the incoming data. Today's Saxo Market Call podcastToday's Market Quick Take from the Saxo Strategy TeamFX Trading focus: USD dumped on Fed Chair Powell speech, but cue the incoming data. Fed Chair Powell failed to deliver the kind of pushback against easy financial conditions that many had the right to expect in his speech yesterday, as the policy guidance was rather light in the speech. Most of the speech centered on a discussion of inflationary risks and where the Fed felt comfortable with the trajectory and outlook, and where it felt less certain, which was especially notable in the labor market/wage dynamics. The heart of the speech discussed the likely permanent reduction in the potential labor force due to older workers leaving the work force during the pandemic and the uncertainty of how quickly the wage pressures would ease. Near the end of the speech, Powell said “Given our progress in tightening policy, the timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level. It is likely that restoring price stability will require holding policy at a restrictive level for some time.” The lack of certainty and Powell suggesting it may be appropriate to reduce the size of Fed hikes to 50 basis points at the December FOMC meeting emboldened the market. The question is whether the very “binary” interpretation of his speech will feed a new extended sell-off in the US dollar, as incoming data could quickly reject the narrative. Soft US data added to the reaction function yesterday and helped US yields lower all along the curve, although this did not unfold until the market had a look at what the Fed Chair had to say. The November Chicago PMI plunged to a scary 37.2 (vs. 47 expected and 45.0 in October) and the November ADP private payrolls change were out at a 21-month low of +127k vs. the +200k expected. Today’s key event risk is the core month-on-month PCE inflation print, expected at +0.3% MoM and 5.0% year-on-year. Any upside surprise would sit very poorly with yesterday’s reaction, as would a stronger than expected November jobs and/or earnings data tomorrow. Chart: USDJPYUSDJPY plunged down through the 137.50 area recent pivot low yesterday in the wake of Fed Chair Powell’s speech as US yields dropped all along the curve, with the US 10-year benchmark yield hitting 3.60%, a new local low ahead of the important 3.50%. The 200-day moving average, currently near 134.50 and rising rapidly, is zooming into view and will be a key test that might be hard to break unless US yields continue lower, which will be far more down to incoming data in coming weeks. The pain trade across markets now will be either a) stronger than expected US data and/or b) more inflationary data regardless of the strength in the real economy (that would require the Fed to remain higher for longer and for the market to eventually reset forward inflation expectations). Also watch global energy prices, a second source of vulnerability for the JPY due to its import of nearly all energy supplies. Some BoJ member jaw-boning overnight on an eventual policy shift also helping the JPY at the margin. Source: Saxo Group Not a big focus for traders, but EURSEK is still up in the high part of the range despite what has normally been a supportive backdrop for SEK (the historic SEK sensitivity to risk sentiment). Why? Likely, as the market shields its eyes at the implications of the rate hike cycle into the Swedish domestic economy on the one hand. We recently saw that staggering 7.7% drop in real volumes of Retail Sales for October and the country’s consumers have yet to feel the brunt of higher mortgage payments as the impact on discretionary spending mounts in coming months (well over half of mortgages taken out in 2020-21 were on floating rates of a year or less). As well, European PMIs are weak and are unlikely to pick up significantly as long as energy prices remain an issue, with the Swedish economy traditionally leveraged to the EU economy. The Swedish November Manufacturing PMI was also out this morning and hit a new cycle low at 45.8. Table: FX Board of G10 and CNH trend evolution and strength.The US dollar down-trend re-intensified yesterday after Fed Chair Powell’s speech, with the USD breaking to new cycle lows in places, but will the incoming data continue to support both risk on and lower US yields, the ideal combination for USD bears? Elsewhere, note the NZD continuing its remarkable run while the JPY has perked up as a function of falling US treasury yields. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.AUDNZD hits new cycle lows today as the market may be fretting RBA dragging its heels on rate tightening more than the supportive news out of China on the trend toward reopening. If there is a pair ripe for mean reversion on the one-month time frame or less, it might be NZDCAD, the trending outlier in absolute value terms. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights 1230 – US Nov. Challenger Job Cuts 1330 – US Oct. PCE Inflation 1330 – US Weekly Initial Jobless Claims 1420 – US Fed’s Logan (Voter 2023) to speak 1500 – US Nov. ISM Manufacturing 1645 – ECB Chief Economist Lane to speak   Source: https://www.home.saxo/content/articles/forex/fx-update-usd-bears-celebrate-lack-of-powell-pushback-01122022

RBNZ inflation forecasts still look like a gamble The RBNZ’s latest inflation projections – from the August Monetary Policy Statement – show an optimistic scenario for disinflation, largely based on assumptions about the impact of restrictive monetary policy and slowing domestic as well as external demand. Those assumptions are, however, met with the risks associated with: a) the extra spending deployed by the government from May, b) the recent spike in oil prices, c) residual supply-related inflationary effects of severe weather events, and d) the still unclear impact of booming net migration on wages and prices (easing labour supply, but raising demand for housing and other services). We think that the RBNZ will continue to acknowledge those risks to inflation and strike a generally hawkish tone this week, with the aim of keeping inflation expectations capped. However, a rate hike seems unlikely a week before the elections and before having seen official CPI and jobs data. Once inflation figures are out, the RBNZ may tolerate a slightly higher-than-anticipated third quarter headline CPI (the projection is for 6.0% YoY), but expect greater scrutiny on non-tradable inflation (projected at 6.2%).    RBNZ inflation forecasts   Polls point to a National-led coalition Advance voting in New Zealand has already been going on for a couple of days, while physical election day will take place on Saturday 14 October, with the preliminary results starting to be released from 7PM local time. Latest opinion polls suggest that the incumbent Labour Party (of former Prime Minister Jacinda Ardern) should lose its parliament majority to the opposition National Party. A centre-right coalition, led by the National Party and supported by the right-wing ACT New Zealand is currently projected to secure somewhere between 45% and 50% of parliament seats, possibly short of a majority. A coalition may need to include the nationalist NZ First to secure enough seats: latest polls give NZ First just above the 5% threshold required to enter parliament without winning a single-member seat.   Single party and coalition opinion polls ahead of the 14 October election   The monetary policy implication of a potential shift in government First of all, the past few years have taught to take pre-election polls with a pinch of salt. Secondly, the impact of politics on NZD are generally quite limited. This time though, a change of government (assuming the polls are right and NZ First joins a National-led coalition) might have some implications for the RBNZ further down the road. The National Party recently published its pre-election fiscal plan, where it pledged more fiscal discipline compared to Labour. Specifically, National said it would spend around NZD3bn less than Labour over four years, with the aim of reducing debt at a faster pace. If the RBNZ links any rebound in CPI to additional fiscal spending, the change in government could suggest a less hawkish RBNZ in the longer run. Another aspect to consider is the RBNZ remit. Over the summer, the National Party Finance spokeperson Nicola Willis pledged to restore the central bank’s sole focus on the inflation target. This would imply removing the RBNZ’s dual mandate (maximum sustainable employment) and potentially reviewing the additional housing stability objective that were added in 2018 and in 2021 respectively. The first – and more impactful – effect would suggest higher RBNZ rates in the medium and long term; while removing housing affordability objective would in theory be a dovish argument, the stricter inflation target would likely overshadow any housing-related considerations.   FX: Domestic factors can determine relative NZD performance The Kiwi dollar has resisted USD appreciation better than other commodity currencies in the past month, and we have seen AUD/NZD fall from the recent 1.0900 peak to below 1.0700 – also thanks to the Reserve Bank of Australia hold this week. We think that the RBNZ will continue to signal upside risks to their inflation forecasts and keep the door open to more tightening if needed this week, but it is very likely that November will be a much more eventful policy meeting for NZD, with new rate and economic projections being released and after the inflation and jobs data for the third quarter are released. Expect some significant NZD volatility around the two data releases this month: we are still of the view that inflation can surprise to the upside, so expect some positive impact on NZD. Markets are currently pricing in 15bp of tightening by November. When it comes to the election outcome, a hung parliament with parties failing to find a working coalition would be the worst scenario for NZD. Should either Labour or National manage to lead a government after the vote, we expect the market implications to be mostly bonded to those for the RBNZ remit (and less so to fiscal spending). So, very limited in the event of Labour staying in power, and moderately positive for NZD (negative for NZ short-dated bonds) in a win by the National Party as markets may speculate on the remit being changed to focus solely on a strict inflation target. The chances of a hike in November will, however, depend almost entirely on CPI and jobs data, not on the vote.   Expect any meaningful swing in NZD to be mostly visible in the crosses, especially in the shape of relative performance against other commodity/high-beta currencies. A combination of National electoral win (and workable coalition) and CPI surprise could make AUD/NZD re-test the 1.0580 May low and slip to 1.0500. NZD/NOK is another interesting pair, with more room to recover after a large summer slump: a return to 6.60 is possible in the above scenario. When it comes to NZD/USD, the swings in USD continue to be an overwhelmingly dominant driver. With US 10-year yields still moving higher and our rates team pointing at 5.0% as a potential top, we see more downside for NZD/USD in the near term. NZD-positive developments domestically would not prevent a drop to 0.5800 if US bonds remain under the kind of pressure we have seen in recent weeks. In the medium run, we still expect US data to turn negative and the Fed to start cutting in first quarter 2024, which should pave the way for a sustained NZD/USD recovery.