AUD/NZD Price Forecast: Aussie rally shows signs of exhaustion ahead of RBA decision
- AUD/NZD is looking for direction below 1.2400 after a mild correction from 1.2491 highs.
- The market is already pricing in a quarter-point RBA rate hike on Tuesday.
- The 4-hour RSI is showing a bearish divergence, suggesting the possibility of a deeper correction.
The Aussie Dollar (AUD) trades practically flat around 1.2390 against the New Zealand Dollar (NZD) on Monday, with all eyes on the Reserve Bank of Australia (RBA), which is expected to hike interest rates on Tuesday. The pair has been rallying non-stop since mid-August, reaching 13-year highs at 1.2491 last week, but technical indicators suggest that bulls might be losing steam
The RBA is widely expected to hike its benchmark interest rate to a 15-year high at 4.6%. Governor Michelle Bullock, however, faces an increasingly challenging situation as inflation risks remain high while economic growth starts to weaken according to September’s Purchasing Managers' Index (PMI) figures, posing a very challenging scenario for a central bank.
The Reserve Bank of New Zealand (RBNZ), on the contrary, has more room to tighten its monetary policy as its benchmark interest rate is at a more moderate 2.75%. The RBNZ, however, conveyed a dovish message after its latest monetary policy decision earlier this month, which has kept the Kiwi from appreciating further.
Technical Analysis: Bearish divergence hints at fading upside traction
AUD/NZD trades at 1.2391, consolidating gains after a more than 4% August-September rally, but the bearish divergence on the 4-hour Relative Strength Index (14), which has also crossed below the key 50 level, and the lowest high on September 23, should act as a warning for bulls.
The Moving Average Convergence Divergence (MACD), in the same timeframe, flattens near the zero line, hinting at a lack of directional conviction in the current range.
Initial support is located at the 1.2370 area (September 16, 24 lows), ahead of the area between 1.2270 and 1.2285, September 7 and 11 lows, respectively. On the topside, above last week's high at 1.2491, and the psychological 1.2500 area, the 1.272% Fibonacci extension of the mentioned rally, at 1.2615, seems a plausible target for bulls.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.13% | -0.28% | -0.27% | 0.18% | 0.02% | -0.16% | 0.28% | |
| EUR | -0.13% | -0.25% | -0.37% | 0.05% | -0.08% | -0.16% | 0.16% | |
| GBP | 0.28% | 0.25% | -0.12% | 0.30% | 0.15% | 0.10% | 0.52% | |
| JPY | 0.27% | 0.37% | 0.12% | 0.40% | 0.24% | 0.18% | 0.64% | |
| CAD | -0.18% | -0.05% | -0.30% | -0.40% | -0.18% | -0.23% | 0.21% | |
| AUD | -0.02% | 0.08% | -0.15% | -0.24% | 0.18% | -0.07% | 0.37% | |
| NZD | 0.16% | 0.16% | -0.10% | -0.18% | 0.23% | 0.07% | 0.46% | |
| CHF | -0.28% | -0.16% | -0.52% | -0.64% | -0.21% | -0.37% | -0.46% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
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