- AUD/NZD drops 40 pips even as New Zealand Q2 CPI defends RBNZ status quo.
- New Zealand Q2 CPI eases to 1.1% QoQ, 6.0% YoY.
- Overbought RSI also favored sellers but 100-SMA, rising trend line from Monday prod bears.
- 61.8% Fibonacci retracement, seven-week-old descending support line challenge sellers; bulls need validation from 200-SMA.
AUD/NZD fails to justify downbeat New Zealand inflation numbers on early Wednesday as it slumps to 1.0790 following the data, before recovering to 1.0815 by the press time. In doing so, the exotic pair also takes clues from the overbought RSI while bouncing off the 100-SMA and an upward-sloping support line stretched from Monday.
That said, New Zealand’s (NZ) headline inflation, per the Consumer Price Index (CPI), edges lower to 1.1% QoQ and 6.0% YoY for the second quarter (Q2) of 2023 versus 1.2% and 6.7% respective priors.
Also read: New Zealand Q2 CPI eases to 1.1% QoQ, NZD/USD marches to 0.6300
It should be noted that the bullish MACD signals and the return of the RSI to the normal region, between 70 and 30, defend the AUD/NZD buyers.
With this, the quote is likely to challenge the latest peak of around 1.0860 before eyeing the 200-SMA hurdle surrounding 1.0890.
However, the 1.0900 round figure and a broad horizontal resistance area established since early June, around 1.0915-30, will be crucial for the AUD/NZD bulls to cross afterward if they want to keep the reins.
On the flip side, the 100-SMA and the aforementioned support line restrict immediate AUD/NZD downside near 1.0800-795, a break of which can drag the quote toward the 61.8% Fibonacci retracement of its May-June upside, near 1.0750.
Following that, a descending trend line from May 30, close to 1.0730 at the latest, will act as the last defense of the AUD/NZD buyers.
AUD/NZD: Four-hour chart
Trend: Recovery expected
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