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AUD/NZD needs to overcome 1.13 to enter new bullish phase

FXStreet (Bali) - AUD is being paid at 1.1180 against its neighboring currency with sellers layered above 1.12 still representing a tough opposition for emerging AUD buyers.

In the current Asian session, the pair is unchanged from its NY close, with traders finding little incentives to increase order flow amid lack of relevant economic data. The only release of note today was an improved NZ business confidence reading, which had no impact in prices.

The next key event to cause significant increase in volatility comes on Thursday, when the RBNZ will release its latest monetary policy decision, in which no updated forecasts will be included. According to RBS: "Lower-than-expected inflation last week gives the RBNZ plenty of scope to maintain its neutral stance, which notes that a “period of assessment” on the policy rate is needed after the Bank increased the rate by 1.0% in 2014."

AUD/NZD is established in a 4 cents range between 1.09 and 1.13, with the macro landscape having recently been supportive for the AUD as long-held NZD longs are reduced amid a reassessment of RBNZ rate hike expectations. Technically, a clean break of 1.13 is required to enter a new bullish phase, while on the downside, focus remains on the 1.10 round number ahead of 1.09, with the 100-day EMA having acted as formidable dynamic support on the last setbacks through Sept/Oct on both 1.09 and 1.10 levels.

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