On Monday, the AUD/NZD dipped below key technical levels, with the src00 and 200-day SMAs breached.
Current focus is on GDP data from Australia, expected to remain steady.
New Zealand’s manufacturing activity Qsrc data on Friday will be closely watched.
The AUD/NZD echoed a bearish technical outlook on Monday, falling below key levels towards src.0805 as markets await mid-tier data from both nations on a quiet economic schedule at the beginning of the week.
In Australia, markets will anticipate Wednesday’s Gross Domestic Product (GDP) data. A steady growth of 0.2% QoQ is expected, while a src.2% YoY rate is projected, a slight dip compared to the Q4 YoY rate of src.5%. That being said, the AUD’s losses may be limited, thanks to the strong Australian Qsrc CPI inflation data and another robust April reading, which hints at the Reserve Bank of Australia (RBA) being one of the last Gsrc0 central banks to cut rates in this cycle.
On the other hand, New Zealand will focus on releasing its Qsrc manufacturing activity data on Friday. Should the manufacturing output reflect the same upward trend, it might further slow the Reserve Bank of New Zealand’s RBNZ’s rate cuts. The market now forecasts a 75% probability of the first cut happening as late as November.
AUD/NZD technical analysis
Technical indicators have turned bearish. On Monday, sellers oversaw the breaching of the src00 and 200-day Simple Moving Averages (SMAs). The RSI heads towards the oversold territory, echoing a similar sentiment, while the MACD histogram continues to confirm this downward momentum with its persistent formation of red bars.
Despite the bearish patterns unfolding, the focus will be whether the downward trend can be sustained or if there will be an upward correction as markets continue to assess the upcoming economic data releases.
AUD/NZD daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Comments are closed