AUD/NZD - Steering away from key levels? - Rabobank

"AUD/NZD this morning steered away from breaking through key technical resistance. The currency pair has been in a downtrend since late October – a move which was triggered by a round of short-covering in the NZD," Rabobank analysts note.

Key quotes

Currently trend-line resistance in the AUD/NZD1.10 area is being underpinned by both the 50 and 100 day simple moving averages which are also coming in close to the 1.1000 level.  Without out a doubt this is a tough resistence area.

That said, in our view whether or not the AUD/USD eventually manages to break above this trend-line resistance with depend on fundamental developments and we see a good chance that the NZD will lose ground. The tone of the RBA and RBNZ at their policy meetings on Feb 6 and Feb 7 respectively could be instrumental in setting to scene for AUD/NZD in the coming weeks.

While we do expect either to rush into hiking interest rates, the first meeting of the RBNZ with Governor Orr at the helm could re-set the more optimistic projections which has been supporting the NZD since the end of last year.