The Reserve Bank of Australia left its rates unchanged overnight at 1.50%.
The Bank noted in its statement that growth in China has slowed a little and that they expected to see inflation tick higher and accelerating in 2019 and 2020. The AUDUSD pair reacted by moving higher to currently trade around 0.7426. Support for the pair comes in at yesterday’s low around 0.7375 followed by the 0.7350 low from last week. A break under the 0.7326 area can see a test on the July lows around 0.7312. Should price be unable to find support here then a drop to 0.7250 could see a resumption of the down trend.
The price has been consolidating from late July forming higher lows and lower highs but remains within the larger down trend as seen on the chart. A break of the top blue trend line would see price move out of the trend and the consolidation pattern. Buyers would look to the 0.7500 level to confirm the break out from 0.7444. From there a move up to 0.7560 would open the way for a break above 0.7644 and the potential to create a higher high.
The Reserve Bank of New Zealand is due to release its rate decision tomorrow night with the expectation that rates will be left unchanged.
The NZDUSD has been trading in a holding consolidation pattern since late June, staying under 0.6860 and above 0.6688. A break lower could point to a continuation of the down trend with a loss of 0.6700 a signal of the first push. Support below comes in at 0.6600 followed by 0.6520.
Resistance for the pair comes in the form of the falling blue trend line at 0.6800. A confirmed break out higher needs to clear 0.6860, to find additional buyers, as there has been a high number of false moves in markets during the summer months. From there a test of the 0.6974 level could follow. A break above 0.7000 would shift the focus onto 0.7058 where strong resistance is found.