AUD/NZD looking for a bottom after moderate RBA rate hike sinks AUD

• The Australian Dollar fell to a 12-day low against the Kiwi after the RBA announced a moderate rate hike.
• The RBA raised benchmark rates by 25 basis points, but with a dovish attitude.
• The RBA sees long-term inflationary pressures, but household consumption will remain weak.

The pair AUD/NZD hit a new November low of 1.0820 after the Reserve Bank of Australia (RBA) eased rate hikes and raised the Australian central bank’s benchmark rate by 25 basis points to 4.35%. In reaction, the Australian dollar (AUD) fell 0.75% against the kiwi (NZD), and the pair is struggling to return to the 1.0850 area.

The RBA noted that despite the need for a further rate hike amid still elevated inflation risks, household consumption remains incredibly weak, and continued rate hikes could threaten to destabilize the Australian economy. as growth prospects remain uncertain.

The Reserve Bank of New Zealand’s (RBNZ) fourth-quarter inflation expectations will be released on Wednesday and stood at 2.83%.

Australian consumer inflation expectations for November, which were last at 4.8% for October, will be released early on Thursday, and the NZ Purchasing Managers’ Index (PMI) will be released late on Thursday. October, which was last below 50.0, at 45.3, implying that business expectations remain tepid.

AUD/NZD Technical Outlook

AUD/NZD continues to see consolidation plays on the chart paper, with the pair cycling near the 200-day SMA for six consecutive months, and Tuesday’s RBA boosted by AUD’s decline sees AUD/NZD NZD testing the main moving average again, which has gone sideways with a notable lack of long-term trend just north of 1.0800.

A set of higher highs and lower lows has technical charts bracing for a breakout as whiplash action gives way to increased volatility, but traders will want to keep an eye out for any false breaks of the upper barrier. at 1.0950 or close to 1.0625.

AUD/NZD Daily Chart

AUD/NZD technical levels