The Australian dollar jumps nearly 1% against the New Zealand dollar following the release of Australia’s inflation report

The Australian dollar surged 0.9% against the New Zealand dollar on Wednesday morning, driven by renewed hawkish signals suggesting the RBA may consider a rate hike next month. This followed Australia’s inflation exceeding expectations and reaching a new multi-month high in May.

The significant rise broke through three Fibonacci retracement barriers (38.2%, 50%, and 61.8% retracement of the 1.1030/1.0732 downtrend), putting pressure on the top of the daily cloud at 1.0943.

A breach above the narrowing cloud top could lead to targets at 1.0959 (Fibonacci 76.4%) and 1.10 (psychological level; Fibonacci 100% expansion of the current third wave of a five-wave cycle from the 1.0732 higher base).

Daily technical indicators show a strong bullish setup but are nearing overbought levels, suggesting potential for consolidation or a limited correction.

Support is expected around the 1.0916/1.0890 zone to cushion any dips and maintain the overall bullish momentum.

Res: 1.0959; 1.1000; 1.1.1030; 1.1062
Sup: 1.0916; 1.0890; 1.0846; 1.0825