The Australian dollar (AUD) and New Zealand dollar (NZD) exchange rate has been a topic of interest for investors in recent times. The AUD/NZD pair has been trading within a narrow range, influenced by the Reserve Bank of Australia's (RBA) interest rate decisions.
The RBA's decision to keep interest rates low has kept the AUD/NZD pair stable, with the AUD trading at around 1.10 NZD. This stability is expected to continue in the near term, as the RBA is likely to maintain its accommodative monetary policy.
Investors should keep an eye on the RBA's meetings and interest rate decisions, as they can have a significant impact on the AUD/NZD exchange rate. The pair's volatility is expected to increase if the RBA decides to raise interest rates.
AUD to NZD Forecast
The AUD to NZD forecast is a crucial aspect of the AUD NZD outlook.
Analysts expect the AUD/NZD rate to rise to 1.12 in the short term, largely due to the RBA's hawkish-for-longer stance, which will boost the appeal of the Australian dollar.
The pair's 200-day moving average currently ranges from 1.0885 to 1.1020/30, and if these levels are successfully broken and retested, it's reasonable to anticipate AUD/NZD could rise to 1.12 by the end of the year.
A deteriorating domestic economy in New Zealand could prompt global investors to seek more stable assets, leading to a weaker Kiwi dollar.
The inevitable end to central bank tightening globally will be a key factor determining the AUD/NZD rate over a longer term.
This could see the AUD/NZD rate move back down to the 1.0550-1.07 range, helping the NZD to appreciate against other currencies on narrowing yield outlooks.
Most analysts expect the Australian dollar to strengthen against the NZD over the next few months due to the RBA's continued rate hikes, with the resulting yield differential potentially lifting the AUD/NZD rate to 1.12 from 1.09 now.
Exchange Rate Analysis
The AUD/NZD exchange rate has been on a wild ride lately. It hit its lowest level this year on May 23 at 1.058.
The Reserve Bank of New Zealand's (RBNZ) surprise announcement that it was done with rate hikes completely reversed the momentum. This trend was underscored after the Reserve Bank of Australia (RBA) lifted its cash rate in Australia on June 6.
The aggressive interest rate moves by the RBA have pushed the AUD higher against its kiwi counterpart. The current yield differential between the AUD and NZD looks set to shrink, which would be to the detriment of the kiwi dollar.
The NZD/USD pair found a strong support near the 0.5500 zone against the US Dollar. It formed a base and started a steady increase above the 0.5800 resistance.
A break above the 0.6000 pivot level and the 50-day simple moving average was a key move for the NZD/USD pair. A new multi-month high was formed near 0.6513 and is currently correcting lower.
The bulls are protecting the broken trend line at 0.6200. An immediate resistance on the upside is near the 0.6450 level.
Technical Analysis
The NZD/USD pair has found a strong support near the 0.5500 zone against the US Dollar.
A break above the 0.6000 pivot level and the 50-day simple moving average has been a significant move for the pair. The bulls are protecting the broken trend line at 0.6200.
A successful close above 0.6500 could start a solid upward move towards the 0.6700 resistance, and potentially even the 0.6800 level.
On the downside, the 0.6220 level is a decent support, below which the pair might decline towards the 0.6150 and 0.6100 support levels, or even the 0.6000 level.
Volatility Around the Pair
The AUD/NZD pair is experiencing potential volatility due to the Reserve Bank of Australia's (RBA) next moves.
The OECD advises keeping interest rates high to control inflation, which could impact the pair's value. The Australian dollar is nearing a resistance line of 110.53, making it an interesting trading opportunity.
Any signal from the RBA regarding rate hikes could further boost the Aussie dollar's value. This is a key factor to consider when trading the AUD/NZD pair.
Jeremy Naylor advocates a bullish position on the Australian dollar, with a specific trading strategy in place.
NZD/USD Technical Analysis
The NZD/USD pair has found a strong support near the 0.5500 zone against the US Dollar.
A key bearish trend line with resistance near 0.6270 was broken, but the bulls are protecting the broken trend line at 0.6200.
The pair declined below the 23.6% Fibonacci retracement level of the upward move from the 0.5511 swing low to 0.6513 high.
The first major resistance on the upside is near the 0.6500 level, and a successful close above it could start a solid upward move towards the 0.6700 resistance.
The 0.6220 level is a decent support, below which NZD/USD might decline towards the 0.6150 and 0.6100 support levels.
The main support sits near the 0.6000 level, and any more losses could open the doors for a drop towards the 0.5800 level.
The NZD/USD pair has a clear move above the 0.6000 pivot level and the 50-day simple moving average.
AUD Strength Outlook
The Australian dollar is expected to strengthen against the New Zealand dollar in the coming months, with most analysts predicting a rise in the AUD/NZD rate to 1.12 from 1.09 now.
Analysts expect the AUD/NZD rate to rise to 1.12, largely because the RBA's hawkish-for-longer stance will boost the appeal of the Australian dollar.
The RBA's continued rate hikes, or at least not ruling them out, will create a yield differential that could lift the AUD/NZD rate to 1.12.
A technical recession in New Zealand could prompt global investors to seek more stable assets, leading to a weaker Kiwi dollar, which would further support the Australian dollar's strength.
The RBNZ's decision to end its rate hikes could also make the New Zealand dollar less attractive to foreign investors, contributing to its decline against the Australian dollar.
If the 200-day moving average of the AUD/NZD pair is successfully broken and retested, it is reasonable to anticipate the rate could rise to 1.12 by the end of the year.
Sources
- https://www.forbes.com/advisor/au/investing/currencies/aud-to-nzd-forecast/
- https://www.fxleaders.com/live-rates/aud-nzd/
- https://paxforex.org/forex-fundamental-analysis/audnzd-forecast-january-31st-2024
- https://fxopen.com/blog/en/aud-usd-and-nzd-usd-2023-chart-outlook/
- https://www.ig.com/en/news-and-trade-ideas/trading-volatility--aud-around-rba-rate-decision-240503
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