AUD/NZD Breaks Out To New 2019 Highs


has broken above 1.0729, it’s 2019 highs. Both the Australian Dollar and the New Zealand Dollar face many of the same risks from the trade war between China and the US. In a nutshell, a slowdown in China would cause a slowdown in both the Australian and New Zealand economies, as both are large exporters to China.

So why is the Australian dollar outpacing the New Zealand dollar? for Australia is at 0.5% (MoM), however the RBA expects growth to strengthen gradually around trend over the next couple of years. The RBA held rates steady at its last meeting at 1.00%. In contrast, the RBNZ surprised the market by cutting 50bps to 1.00% at its August 7 meeting and said that growth has slowed and that headwinds continue to strengthen. Should economic growth slow more than the RBNZ expects, they have said they are willing to lower even further. Next week, New Zealand releases . Previous GDP was at 0.6% (MoM) vs. expectations for 0.4% next week.

With the 2 Central Banks hinting that their respective economics may be moving in opposite directions, it’s not surprising that bottomed on the date of the last RBNZ meeting. Friday the pair broke to new highs on the year (current high is 1.0785). However, there is resistance just above current levels at 1.0812, which is the 61.8% retracement from the August 2018 highs to the January 3 spike lows. Next resistance level after that is horizontal resistance near 1.0875. Support below is at the previous highs of 1.0729. Also, note the RSI has moved into overbought territory.


Source: Tradingview,

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link