AUD/NZD sticks to intraday gains above mid-1.0700s post-Australian CPI report
- AUD/NZD gains some positive traction and stages a modest recovery from a multi-week low.
- Spot prices move little following the release of the latest Australian consumer inflation figures.
- The recent breakdown and acceptance below the crucial 200-day SMA favour bearish traders.
The AUD/NZD cross attracts fresh buying near the 1.0745-1.0740 area during the Asian session on Wednesday and sticks to its modest gains following the release of the latest Australian consumer inflation figures. Spot prices, however, lack bullish conviction and currently trade just above the mid-1.0700s.
The Australian Dollar (AUD) gets a minor lift after the Australian Bureau of Statistics reported that the headline CPI accelerated from 4.9% to 5.2% during the 12 months leading up to August 2023. The data reaffirms expectations that the Reserve Bank of Australia's (RBA) cash rate will peak around 4.55% in the first quarter of 2024, higher than the current 4.10%, and assists the AUD/NZD cross to regain some positive traction.
That said, the lack of any follow-through buying warrants some caution before positioning for any further intraday appreciating move. Investors remain concerned about the worsening economic conditions in China. This, along with persistent worries over a real estate crisis in the world's second-largest economy, holds back traders from placing aggressive directional bets around the antipodean currencies and caps the AUD/NZD cross.
Furthermore, the recent breakdown and acceptance below the 200-day Simple Moving Average (SMA) suggest that the path of least hurdle for the AUD/NZD cross is to the downside. Hence, any subsequent move up might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly.
Technical levels to watch