AUDNZD reversing upwards from trendline support
The antipodean currencies have enjoyed a period of relative strength of late, with Chinese concerns easing and a number of key commodities gaining ground. However, when comparing both the Australian Dollar to the Kiwi, we can see that the recent trend has generally favoured the latter. Looking at the wider AUDNZD chart, price has declined into an ascending trendline that held prices up over the course of recent months. We are already seeing signs of another rebound, with price gaining ground since reaching new lows just above the 1.06 handle.
A look at the four-hour chart highlights the potential for a near-term rebound, with price having formed intraday higher highs and lows. With that in mind, the existence of the ascending trendline the response of price action thus far signals the potential for a rebound as long as price does not sink back below the lows established last week. Near-term resistance comes in the form of the 1.073 and 1.076 Fibonacci resistance levels.
Looking ahead, watch out for the quarterly New Zealand CPI inflation release today. With markets looking for a potential rise to 1.9% (from 1.1%), we could be looking at potential NZD volatility. Also keep an eye out for commentary from the RBA minutes and an appearance from new RBA Governor Bullock tomorrow.
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