AUD/NZD tallies a four-day winning streak, eyes on New Zealand key data

• On Wednesday, the AUD/NZD extended its gains and is up by 1% in the last four sessions.
• New Zealand's Q1 GDP figures will be closely looked at on Thursday’s Asian session.
• Australia's AUD gained momentum post-RBA's hawkish hold with the cash rate maintained at 4.35%.

The AUD/NZD extended its winning streak on Wednesday, to a four-consecutive day rise which saw the pair rise by nearly 1%. Investors are anticipating the upcoming Gross Domestic Product (GDP) revisions from Q1 from New Zealand while continuing to process the Reserve Bank of Australia's (RBA) recent decision.

In New Zealand, recent data signaled a sharp decline in the country's services sector in May. Also, GDP figures showed two consecutive quarters of negative growth, indicating a recession. This has led to heightened speculation that the Reserve Bank of New Zealand (RBNZ) will soon resort to reducing interest rates, with a 25 bps cut expected at the November meeting.

On the Australian front, the AUD found strength following the RBA's hawkish hold. As per expectations, the cash rate remained at 4.35%, with no discussions related to a rate cut. Governor Bullock confirmed that the option of raising rates was deliberated upon during the meeting. Furthermore, the RBA showcased concerns about the inflation scenario and added that they would undertake the required measures to bring inflation back within the target range. In that sense, as the RBA and RBNZ policies diverge, there might be further upside for the cross in place.

AUD/NZD technical analysis

The technical outlook for AUD/NZD appears positive in the short term, with the pair registering a four-day winning streak. In those sessions, indicators recovered with the Relative Strength Index (RSI) jumping back above 50 and the Moving Average Convergence Divergence (MACD) prints rising green bars.

However, as the 20-day Simple Moving Average (SMA) crossed below the 100 and 200-day SMAs, the upward potential may be capped.

AUD/NZD daily chart