AUD/NZD Surge Past 20-DMA After RBA Stands Pat
The AUD/NZD cross surged past 20-day SMA resistance near 1.0700 handle with ease after the RBA decided to keep the cash rate unchanged at 1.75%.
Following RBA's decision to stand pat, the pair extended its up-move for second consecutive day and is currently trading comfortably above 1.0700 handle at 1.0720. Traders now look forward to RBNZ's monetary policy decision, later during the week, in order to determine further near-term direction for the pair.
RBNZ is scheduled to announce its monetary policy decision on Thursday, where consensus is pointing to a 25bps rate cut that would bring down benchmark interest rates to 2.0% from current 2.25%. Expectations of a yet another rate-cut in a span of 4-months might to extend support for further near-term up-move for the AUD/NZD cross.
Technical levels to watch
From current levels, 1.0740 area seems to act as immediate resistance, above which the pair seems all set surpass last week's high resistance near 1.0775 level and head towards reclaiming 1.0800 handle. Further, a decisive strength above 1.0800 resistance has the potential to continue boosting the pair in the near-term towards its next major resistance near 1.0900 handle, also coinciding with 50-day SMA region.
Meanwhile on the downside, 20-day SMA near 1.0700 region now seems to act as immediate support. Failure to hold this immediate support seems to drag the pair back towards 1.0655-50 horizontal support, which if broken might negate the near-term bullish outlook and drag the pair back below 1.0600 level to test 1.0570-65 support.