As expected, the RBNZ left rates on hold with the OCR projected to stay at the current 1.75% level through 2019 and 2020. The outcome is not as dovish and the bird is taking flight. The bird is up to a high of 0.6830 vs the dollar, so far, touching the 50% fibo retracement level.
The decision follows the RBA’s dovish week last week which has sent the Aussie on the backfoot, trading as a proxy to EM-FX and China while the greenback remains in vogue due to the Central Bank divergence theme, despite a neutral Fed. Heightened uncertainty over US-China trade relations and China economy fears is likely to keep the antipodes on the backfoot but for the meantime, the bulls are making the most of the RBNZ today, but will likely struggle when taking the RBNZ’s warnings that “risk of a sharper downturn in trading partner growth has heightened.” AUD/NZD levels S3 is located at 1.0437 and teh price struggles to hold on below there at this juncture. However, a break beyond S3 targets 1.0398 swing low fractal, guarding territory towards the June 27th swing low of 1.0371 ahead of the flash crash lows down at 1.0192. Upside Fibo targets are located at 1.0692 (50%) and 1.0807 (61.8%). 1.0774 is the 200-D SMA.
Original from: www.fxstreet.com