AUDNZD extends its downside momentum following the RBNZ’s hawkish rate cut

The pair slid by a full big figure and printed the lowest level in nearly a month after the Reserve Bank of New Zealand delivered a widely expected 25 basis point rate cut, while simultaneously signaling a pause, a shift that provided support to the New Zealand dollar.

Recent selling pressure extended beneath the November 18 higher low at 1.1443, and a sustained break below this level points to completion of a bearish failure swing, keeping downside risks in focus. The daily structure has deteriorated, as the 14-day momentum turned negative and the converging 10- and 20-day moving averages are close to forming a bearish crossover.

At the same time, a swift rebound from the session low at 1.1406, slightly below the 61.8% Fibonacci retracement of the 1.1283/1.1636 advance, highlights emerging headwinds for bears around the key 1.1400 zone. However, bearish signals on the hourly studies suggest that any rebounds are likely to be limited and may offer improved levels to re-enter short positions.

The broader bearish view is reinforced by hotter-than-expected Australian October inflation data, which is likely to raise pressure on the Reserve Bank of Australia and weigh further on sentiment toward the Australian dollar.

A daily close below the broken 50% Fibonacci level at 1.1460 is required to maintain a near-term bearish bias and to keep the risk of a renewed test of the 1.1400 area alive. A violation of this zone would open the way toward key supports at 1.1316 and 1.1286, which align with the top of the ascending daily cloud and the October 22 higher low.

Res: 1.1460; 1.1500; 1.1527; 1.1553
Sup: 1.1418; 1.1400; 1.1367; 1.1316