AUD/NZD bulls eyeing-up critical hourly resistance
- AUD/NZD bulls eye a test of hourly resistance.
- Central banks have been the driving force, bulls leaning on Australia's vaccination roll-out.
AUD/NZD fall below the ascending trendline support on July 14 at 1.0654 and has continued its descent since, sinking to fresh lows of 1.0345 at the turn of the month.
Today, the cross is 0.11% higher on the day and is basing, on the way to trendline resistance.
'' Although we do not think relative macro backdrops support an advance towards parity, that could be exactly what’s in train,'' analysts at ANZ Bank argued. ''Hard to argue with the trend, for now.''
Central banks are the driving force and the US dollar is governing back ground, helping to lift the antipodeans.
The Kiwi is back above 0.71 as the US 10yr Treasury bond yield slips back below 1.3% while the big event overnight was the European Central Bank meeting.
The central bank trimmed the pace of bond purchases, but Lagarde characterised it as a “recalibration” rather than a taper.
Volatility was low in the forex space which leaves the cross consolidated as markets weigh the recent Reserve Bank of Australia's decision to proceed with its planned QE taper, firming the Aussie.
The caveat is the lockdowns in the nation, however, ''Australia has the potential for high vaccination rates which would boost both GDP and the Aussie,'' analysts at Westpac argued.
AUD/NZD technical analysis
Daily chart
The bulls will need to break up beyond the trendline resistance as illustrated above.
Hourly chart
1.0380 is a critical level of hourly resistance on the way to the trendline resistance.