AUDNZD to Find Support From Diverging RBA and RBNZ Stance

AUD & NZD Analysis and News

  • RBNZ Sees lower for longer interest rates, RBA remains adamant of a hike
  • AUDNZD primed for further lift amid diverging monetary policy

See how retail traders are positioning in AUD and NZD as well as other major FX pairs on an intraday basis using the DailyFX speculative positioning data on the sentiment page.

A tale of two central banks

On Wednesday, RBNZ Governor Orr marked his inaugural meeting by delivering a somewhat more dovish statement than had been expected by market participants, consequently weighing on NZD. Inflation had been revised lower following the soft figures for Q1 (Y/Y reading lowest since Q3 16), while the Official Cash Rate path had been cut by 10bps in the June-19 quarter to 1.8% from 1.9%, supporting the case that rates will be “lower for longer” (echoed by RBNZ Governor).

Most notably, the RBNZ stated that “rates can move up or down”, which is in contrast with the RBA who have stated that the next move is likely to be a hike. Despite both central banks expected to remain on hold throughout 2018, this does in turn signal the beginning of a divergence in monetary policy between the RBA and RBNZ, which in effect supports the case for a rise in AUDNZD.

For a more in-depth analysis on AUD and NZD, check out our Q2 Forecast


Chart by IG

AUDNZD moving beyond 1.0840 with a push through 1.0880 could set up further upside for the pair to march on towards 1.10

Technical Levels

  • Support: 1.0795 (38.2% Fibonacci Retracement of 1.1291-1.0488 fall), 1.0750, 1.0658 (May 9th low)
  • Resistance: 1.0842 (January 12th low), 1.0872 (200DMA), 1.1072 (2018 high)

— Written by Justin McQueen, Market Analyst

To contact Justin, email him at

Follow Justin on Twitter @JMcQueenFX

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