Today, the Reserve Bank of Australia (RBA) decided to cut the interest rate from 4.10% to 3.85%, continuing its easing policy after a previous cut from 4.35% in February.
According to Reuters, the RBA today cited:
→ progress made in bringing inflation under control;
→ economic risks linked to the ongoing global trade war.
Although the RBA’s decision was widely expected, the Australian dollar weakened noticeably against other currencies — including the New Zealand dollar. The AUD/NZD rate fell to its lowest level in nearly two weeks.
Technical Analysis of the AUD/NZD Chart
From a technical perspective, a bearish breakout occurred:
→ below the lower boundary of the upward trend channel that began in April;
→ and below the 1.087 level, which had served as support in mid-May.
It is possible that:
→ the decline may slow around the 1.083 support zone, where strong demand was evident in the long lower wicks of the 9 May candles (marked with an arrow);
→ the 1.0870–1.0880 area will act as resistance going forward, potentially leading to a retest of the bearish breakout zone on the AUD/NZD chart.
As the market continues to price in the RBA’s decision, attention will turn to the Reserve Bank of New Zealand meeting on 28 May, where a similar rate cut could be on the table.
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