- AUD/NZD drops 50 pips to refresh multi-day low after Australia’s Monthly CPI for May disappoints.
- Nearly oversold RSI, fortnight-old support line challenge bears at monthly low.
- Bulls need successful break of three-week-old horizontal resistance to retake control.
AUD/NZD slumps 50 pips to refresh the monthly low around 1.0800 after Australia’s headline inflation data disappoint the buyers on early Wednesday. That said, the pair rebounds to 1.0825 following the data.
That said, Australia’s Monthly Consumer Price Index (CPI) for May drops to 5.6% YoY versus 6.1% expected and 6.8% prior. The same amplifies concerns about the Reserve Bank of Australia’s (RBA) pause in the rate hikes after two consecutive hawkish surprises, which in turn drowns the Australian Dollar (AUD) versus other currencies.
While the nearly oversold RSI conditions join the two-week-old falling support line to trigger the quote’s latest bounce, the 200-SMA restricts the immediate upside of the pair near 1.0850.
Following that, a broad resistance zone comprising multiple levels marked since early June, near 1.0910-35, will be a tough nut to crack for the AUD/NZD bulls.
Meanwhile, a downside break of the immediate support line, close to 1.0790 by the press time, will direct the AUD/NZD price to the 61.8% Fibonacci retracement of the May-June upside, near 1.0750.
In a case where the exotic pair remains bearish past 1.0750, the 1.0700 round figure may act as the last defense of the bulls.
AUD/NZD: Four-hour chart
Trend: Corrective bounce expected
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