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AUD/NZD: a little recovery action onto 1.09 handle

FXStreet (Guatemala) - AUD/NZD bulls are getting behind the consensus of a rate cut from the RBNZ this week and is about the only pair that has giving us any action in an overly quiet Asian session so far ahead of Tokyo. The price has drifted up from the region of 1.0877 and is tackling the 1.09 handle at the time of writing having scored a recent high of 1.0912 so far.

However, analysts at Brown Brothers Harriman, explained that last minute doubts that the Reserve Bank of New Zealand will cut rates helped spur a rally that lifted the New Zealand dollar to near $0.6800 before the weekend. "Technical indicators suggest potential for additional gain. Above $0.6800, resistance near $0.6840 may slow the pace, but a test on the October high's (~$0.6865 and $0.6900) seems likely. This analysis is consistent with the Australian dollar losing ground against the Kiwi. A break of NZD1.0865 could spur a 1-2% decline."

Apart from the RBNZ, the key data for the cross this week will come in the Aussie unemployment rate that is expected to come at 6.0% vs 5.9% previous. The October employment change of 58.6k will be measured by November's result as well for a clue as to whether the RBA's preferred performance in the jobs sector remains on target allowing them continue enjoying the festive season without intervening for the meanwhile.

AUD/NZD levels

AUD/NZD is targeting the 20 SMA on the hourly time frame of 1.0918 while trading below the pivot of 1.0930 as next target. R1 comes as 1.0991 and R2 comes as 1.1093 on the wide. 1.0865, as indicated by the analysts at BBH above, is a significant support level while the 200 SMA on the 4hr time frames stands at 1.0846. S3 comes as 1.0828 and S2 at 1.0767. 4hr RSI (14) is above oversold territory while price is starting to recover from the lows of 1.0864.

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