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Testing $1.08; RBNZ, RBA Gov Lowe On Tap


AUD/NZD is testing the $1.08 handle this morning, narrowing rate differentials have aided a recovery off month to date lows.

  • The pair sits a touch below the $1.08 handle after rising ~0.3% in yesterday's trade, as of yet the cross has not been able to sustain a break of the figure.
  • Rate differentials, observed via 2-Year Swaps, sit at -102bps having been as wide as -112bps in early July.
  • The 20- and 50-Day EMAs have crossed the 200-Day signalling more potential downside in the cross. Bears target the low from 26 May ($1.0708), a break through here opens low from 24 May ($1.0568).
  • Bulls first look to break the 200-Day EMA ($1.0845), this opens the high from May 29 $1.0924.
  • On tap today we have the RBNZ's monetary policy decision, no change to the OCR is expected, and RBA's Lowe speaks.

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