AUD/NZD has dropped like a rock over 1.2 cents after the RBA decided to cut the interest rate by 25bp to 2.25% today, leading the exchange rate to trip stops sub 1.0620, printing a new 2-week low of 1.0574 before a rebound towards 1.0610/15 presently.
On the policy statement, a more dovish rhetoric was observed, noting that "at today's meeting, taking into account the flow of recent information and updated forecasts, the Board judged that, on balance, a further reduction in the cash rate was appropriate." As per the RBA's stance on the AUD, Stevens noted: "A lower exchange rate is likely to be needed to achieve balanced growth in the economy."
Technically, AUD/NZD is looking to carve out a bottom around 1.0575, so that it can establish a provisional trade range (quite predominant on this particular pair) between 1.0775/1.08 and 1.0575/80. Given the RBNZ vs RBA stance in monetary policies, both showing dovish prospects, trading opportunities at the extreme of the range could arise.
On the policy statement, a more dovish rhetoric was observed, noting that "at today's meeting, taking into account the flow of recent information and updated forecasts, the Board judged that, on balance, a further reduction in the cash rate was appropriate." As per the RBA's stance on the AUD, Stevens noted: "A lower exchange rate is likely to be needed to achieve balanced growth in the economy."
Technically, AUD/NZD is looking to carve out a bottom around 1.0575, so that it can establish a provisional trade range (quite predominant on this particular pair) between 1.0775/1.08 and 1.0575/80. Given the RBNZ vs RBA stance in monetary policies, both showing dovish prospects, trading opportunities at the extreme of the range could arise.
