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AUD/NZD retesting 1.13, bullish resolution looms?

FXStreet (Bali) - AUD/NZD is currently trading near a key level at 1.13 round number, retested in multiple occasions since early August this year, yet unable to confirm an upward resolution that may see the pair potentially entering a new bullish phase.

Following the RBNZ policy decision, BNZ reviewed the outcome, noting: "The RBNZ has, for all intents and purposes, said it is on hold for the foreseeable future. Importantly, it has removed the phrase “some further policy tightening will be necessary to keep future average inflation near the 2 percent target mid-point and ensure that the economic expansion can be sustained”. It has sufficed with “A period of assessment remains appropriate before considering further policy adjustment”.

BNZ adds: "We think this translates into a very strong commitment not to raise interest rates again unless there are clear signs that inflation is going to go through the mid-point of the target band. If one takes this literally then the RBNZ is either not going to hike again until 2016 or, in fact, at all."

According to Sean Lee, Founder at FXWW: "The cross has made a big move over the last few hours and selling into resistance levels near current market at 1.1285 does make good risk-reward sense. The market will pore over the RBNZ language but I doubt that the cross has the momentum to take out these levels without a fight."

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RBNZ sold next NZD 30 mln in September

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