AUD/NZD could see sharp moves this week as markets digest a run of significant releases from both economies. RBA minutes on Tuesday, Australia’s monthly July CPI on Wednesday, and New Zealand’s ANZ business confidence survey on Thursday are possible movers.
In New Zealand, Q2 retail sales offered an upside surprise today. Headline volumes rose 0.5% qoq, beating expectations of 0.2%, while ex-auto sales jumped 0.7% qoq, defying forecasts of contraction. However, the Kiwi failed to capitalize, remaining pressured after last week’s dovish RBNZ decision. Markets have since shifted toward expecting two more rate cuts before the easing cycle ends.
RBNZ Governor Christian Hawkesby reinforced that view by stressing that both remaining policy meetings this year are “live.” This leaves scope for either two consecutive cuts in 2025, or one this year and one early next year, depending on how upcoming economic data evolves.
Meanwhile, the RBA appears more deliberate. After cutting 25bps earlier this month, the new projections signaled that one additional cut this year and two in 2026 remain the likely path under current assumptions. November is seen as the more appropriate window for action, allowing time to absorb Q3 CPI data. This week’s minutes and July’s monthly CPI release will be important checks on whether that outlook holds.
Technically, AUD/NZD’s near-term rally remains intact, supported by firm momentum on D MACD. As long as 1.1020 holds, further gains are likely, with scope toward the 138.2% projection of 1.0649 to 1.0920 from 1.0744 at 1.1119.
However, there is no clear sign of medium term range breakout yet. Hence, AUD/NZD would likely lose momentum above 1.119. Upside should be capped by 161.8% projection at 1.1182, which is slightly above key resistance of 1.1177 (2024 high).
