Market Spotlight: AUDNZD Plunges on RBNZ Hike - FOMC Minutes Next

RBNZ Hikes Again – More to Come, But Slower PaceThe RBNZ hiked rates once again overnight at its February MPR meeting. Despite signals in November of a further .75% hike to come, the bank ultimately opted for a smaller hike in the face of the recent weather disasters in New Zealand which have ravaged parts of the country and are expected to exacerbate the economic issues facing the country. Along with the smaller hike, the RBNZ also forecast a further pivot in April with a projected .25% hike. Finally, while the bank maintained its peak rate level, the RBNZ said it now expects to take longer to hit that rate with a slower pace of tightening now planned over 2023. However, the RBNZ was clear in reaffirming that it will continue with tightening this year in order to drive inflation down.AUD SuffersThe reaction in NZD was most pronounced against AUD with AUDZND plunging on the back of the meeting. AUD has been under pressure this week since the RBA meeting minutes despite the minutes revealing a more hawkish skew among members. Looking ahead, the pair looks vulnerable to further downside should today’s FOMC minutes provoke a fresh rally in USD, with AUD likely to bear the brunt of the move.Technical ViewsAUDNZDThe rally in AUDNZD off last year’s lows has been framed by a rising wedge pattern. With plenty of bearish divergence into recent highs, risks of a reversal lower are growing. Price is now testing below the structure and is currently probing support at 1.0954. If we break below here, there is open water down to 1.0750 next, in line with weakening momentum studies.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/market-spotlight-audnzd-plunges-on-rbnz-hike-fomc-minutes-next
via IFTTT