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Firms Above 20-Day EMA, Rate Differentials Narrow


AUD/NZD has firmed ~0.4% this morning after the Q3 NZ CPI was weaker than expected. The cross has risen above its 20-Day EMA ($1.0721) and sits at its highest level since late September last printing at $1.0735/45.

  • Rate differentials, observed via 2-Year Swaps, have narrowed to -132bps from -142bps this morning. Yesterday's closing levels were the widest since late May.
  • On the upside bulls now target a move above the $1.08 handle and 200-Day EMA ($1.0822). This opens $1.0923, the high from 18 Sep and the $1.10 handle.
  • Bears immediate focus is on the 20-Day EMA and the $1.07 handle. A break below here opens the $1.06 handle, the low from 22 May ($1.0560) and the 2022 low ($1.0471).

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