AUD/NZD rallies as RBNZ signals dovish shift

• 
  AUD/NZD
  witnessed
  a
  significant
  rise
  to
  1.1090,
  to
  multi-year
  highs.
• 
  The
  RBNZ
  kept
  rates
  steady
  at
  5.5%,
  signaling
  a
  willingness
  to
  ease
  sooner
  rather
  than
  later.
• 
  RBA
  and
  RBNZ
  policy
  discrepancies
  might
  favor
  the
  AUD.

On
Wednesday,
the
AUD/NZD
rose
to
a
fresh
high
since
2022,
in
reaction
to
the
Reserve
Bank
of
New
Zealand
(RBNZ)
decision.

The

RBNZ,
as
expected,
kept
the
Official
Cash
Rate
(OCR)
anchored
at
5.50%,
but
hinted
at
potential
rate
cuts
in
the
near
future.
The
RBNZ
highlighted
the
signs
of
easing
inflation
persistence
and
the
expectation
of
headline
CPI
returning
to
target
in
the
second
half
of
the
year.
Moreover,
it
addressed
the
impact
of
tight
policy
measures
on
the
economy
and
deviated
from
the
May
22
meeting
where
Governor
Orr
confessed
that
a
hike
was
a
“real
consideration”.

Following
the
decision,
a
rate
cut
is
now
priced
in
October,
with
the
market
pricing
in
nearly
60%
odds
of
an
earlier
cut
in
August.
On
the
other
hand,
while
the
Reserve
Bank
of
Australia
(RBA)
seriously
considers
a
hike,
the
pair
may
see
more
upside.

AUD/NZD
technical
analysis

In
the
short-term,
the
AUD/NZD
maintains
a
bullish
momentum
due
to
the
recent
rally
but
overbought
conditions
seen
in
the
Relative
Strength
Index
(RSI)
and
the
Moving
Average
Convergence
Divergence
(MACD)
indicate
that
a
correction
may
be
imminent.

Support
levels
have
moved
and
now
stand
at
1.1050,
1.1000,
and
1.0950.
The
next
challenge
for
buyers
is
to
reach
and
retain
the
1.1100
target
point.

AUD/NZD
daily
chart