AUD/NZD rises sharply today as markets await RBA rate decision in the upcoming Asian session. Given the surprise drop in unemployment and strong inflation data, RBA is likely to just wrap up the QE program, rather than winding it down to end in May. That would also give the central bank some flexibility to raise interest rate to combat inflation. The question is how RBA would shape market expectation on the timing of the rate hike, or leave it to the Statement on Monetary Policy to be released later in the week. There is prospect of more upside in Aussie in crosses in RBA delivers something more hawkish than expected.
AUD/NZD’s is now extending the whole rise from 1.0278. Next target is 161.8% projection of 1.0278 to 1.0610 from 1.0314 at 1.0851. A bullish scenario is that corrective fall from 1.1042 has completed with three waves at 1.0278 and rise from 0.9992 is ready to resume. The reaction to 1.0944 resistance will reveal if it’s the case. For now, near term outlook will stay bullish as long as 1.0654 support holds, in case of retreat.
Suggested readings on RBA:
- Two Trades to Watch: EUR/USD, AUD/USD
- Aussie Storms Higher, RBA Next
- New Forecasts in RBA SOMP to Be Consistent with Rate Hike in 2022
- RBA to End QE and Bring Forward Rate Hike Guidance: AUDUSD
- RBA Meeting: Managing Rate Hike Expectations
