The Reserve Bank of New Zealand left rates unchanged at 1.75% overnight but cut its forward guidance for rates and inflation. The Bank said that rates are expected to remain on hold for longer through 2019 and 2020 but they expect to hike to 2.0% in December 2020. They did say that the next move could be up or down. However in a separate interview Assistant Governor McDermott said that the chances of a rate cut have increased. The AUDNZD pair has been climbing higher and this was continued with the rate decision and statement. But the pair has given up some of its gains after McDermott’s comments.
The pair is currently trading back at the 1.1144 resistance level. Resistance comes in at 1.1200 followed by 1.1224 and the recent high at 1.1290. A break above this point would set a retest of 1.1300 and provided a double top is not formed, a push higher towards 1.1500 may be expected. Support for the pair can be seen at 1.1100 and 1.1072 with a firm level at 1.0993. A move back down to this area puts the pair back in the sideways trend. A break under 1.0849 paints a more bearish view on the chart and could entice sellers to look for 1.0700.
The USDJPY pair has broken down under its rising supporting trend line from April yesterday at 111.200. The pair reached a low of 110.700 and has move back higher from there to trade at 111.078. Support for the pair comes in at 110.500 followed by 111.000. The higher swing low is found at 109.380 with strong support around the 108.000 area where another swing low is located.
Resistance can be found at 111.393 ahead of 111.500. A break above this level would present a more bullish setup for the pair conformed by a move above 112.155. From here buyers would look to retest the high at 113.200. A break above this level would open the way to 115.000 and ultimately 118.000 or even 120.000.