AUD/NZD powered through 1.0672 support to resume the decline from 1.1085 after larger than expected rate hike by RBNZ. Tightening is not finished with RBNZ yet, another 25bps hike could be delivered to bring the OCR from today’s 5.25% to 5.50 within first half of the year. Any movements in the OCR beyond that point will be data-dependent. Meanwhile, RBA has started the pause yesterday by holding cash rate target unchanged at 3.60%. There are talks that this level could be RBA’s peak rate in the current cycle.
From technical point of view, near term outlook will now stay bearish as long as 1.0789 resistance holds in AUD/.NZD. Next target is 61.8% projection of 1.1085 to 1.0672 from 1.0789 at 1.0534. In the larger picture, the down trend from 1.1489 (2022 high) could be ready to extend through 1.0469 if monetary policies diverge further.