AUDNZD is one of the major FX crosses that is making the biggest moves today. This is because AUD is one of the best performing G10 currencies today while NZD is one of top laggards.
AUD caught a bid following testimony of RBA Governor Lowe. Lowe said that RBA policy has now entered a 'calibration phase'. This means that the Bank will take time to analyze data and decide whether more rate hikes are needed. Lowe said that all options remain on the table and markets have actually taken his testimony as hawkish. Markets are now pricing in a 4.24% rate peak in February 2024, suggesting a 70% chance of 25 bp rate hike by then. However, it should be said that this was Lowe's final testimony as he is set to leave RBA next month. Having said that, his comments may not be fully reflective of a policy that his successor will undertake.
On the other hand, NZD is pulling back following the release of manufacturing PMI for July from New Zealand. Index dropped from 47.4 to 46.3 in July, marking the fifth consecutive month of sub-50 recessionary readings. This was also the lowest reading since August 2021, when New Zealand was still fighting the Covid pandemic.
Taking a look at AUDNZD chart at D1 interval, we can see that the pair has been trading mostly sideways recently with a slight upside tilt. An ascending triangle pattern can be spotted on the chart with the 1.1050 price zone acting as the upper limit and the upward trendline acting as the lower limit. Pair broke above 50- and 200-session moving averages today and is looking towards the 1.0925 zone that marks the neckline of the double bottom pattern (DB). A break above the 1.0925 zone may trigger an upward move towards 1.1130 - the textbook range of the DB pattern. However, this would mean breaking above the 1.1050 zone - the upper limit of the triangle pattern - what would be seen as a signal for an even bigger upward move as textbook range of the upside breakout from the triangle pattern can be found in the 1.1642 area.
AUDNZD at D1 interval. Source: xStation5
