The Australian dollar against the New Zealand dollar exchange rate may have peaked as analysts predict that the Reserve Bank of New Zealand will temper its dovish stance after the expected interest rate cut this week.
Strategists at New Zealand bank and National Australia Bank said that the Australian dollar against the New Zealand dollar is currently close to its highest level in a decade and could fall to around 1.14. They believe that the Reserve Bank of New Zealand will signal the end of the easing cycle after cutting interest rates by 25 basis points on Wednesday. If the Reserve Bank of New Zealand does cut rates, the Australian dollar against the New Zealand dollar will fall by nearly 1% from last Friday’s closing price of 1.15.
This will mark the end of the bull market for the Australian dollar against the New Zealand dollar, which was previously driven by a significant interest rate differential between the two countries – while the Reserve Bank of New Zealand was actively cutting interest rates, the Reserve Bank of Australia was reluctant to do so. ANZ Bank currently believes that there is room for the yield differential between the Australian dollar and the New Zealand dollar to narrow, which may provide some support for the New Zealand dollar and limit the gains of the Australian dollar against the New Zealand dollar.
Rodrigo Catril, a foreign exchange strategist at National Australia Bank, said: “Most of the gains in the Australian dollar against the New Zealand dollar have already passed.” He expects the Reserve Bank of New Zealand to cut interest rates “once and for all”, which may help curb the weakness of the New Zealand dollar.
Technical indicators support the expectation of a reversal in the decline of this currency pair. A bearish candlestick pattern similar to a shooting star formed on November 13th, which typically signals a reversal of an uptrend. The slow stochastic indicator (a momentum indicator) for this currency pair has also turned bearish.
Although technical indicators suggest a possible reversal, a significant decline in this currency pair is unlikely. Jason Wong, a foreign exchange strategist at BNZ, said that the significant interest rate advantage of Australia over New Zealand still supports this currency pair.
As a result, all eyes will be on the Reserve Bank of New Zealand’s decision and its future policy direction. Although New Zealand’s economic growth remains weak at present, the country’s manufacturing Purchasing Managers’ Index (PMI) in October rose to the highest level in three months, indicating signs of economic recovery.
Technical analysis:
The functions of WeChat are subject to occasional restrictions. If you want to try the plugin, please leave your contact information when adding a friend so that we can add you back easily!!!
Gold: The yellow alert we issued in the plugin last Friday for the rebound after the sweep of liquidity has achieved excellent returns. For today, we hope to see the price further correct the decline of last week. We tend to seize the opportunity of a pullback after a momentum break, while reserving the rebound from the liquidity sweep near 4020. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg and leave your contact information for us to get back to you.
Nasdaq: Our strategy of buying after the pullback following the breakout to 24,300 in the blue zone last Friday was very successful, yielding a profit-to-loss ratio of over 3 times. We will continue to follow the breakout and pullback strategy intraday. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg and leave your contact information in the message for us to get back to you.
Crude oil: After the price enters a period of consolidation, we will try to wait for a pullback after a breakout for an intraday buy. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V: Hana-fgfg and leave your contact information in the message for us to get back to you.
Key economic data and events to focus on today:
23:30 U.S. Dallas Fed Manufacturing Index for November
