AUD/NZD Forecast: What’s Ahead After Hitting its 2018 High

Summary:
• The AUD/NZD price spiked to the highest point since 2018 after the latest economic data from Australia and New Zealand.

The AUD/NZD price spiked to the highest point since 2018 after the latest economic data from Australia and New Zealand. It rose to a high of 1.1180, meaning that it has risen by more than 8% this year. The pair is trading at 1.1155 after the Australian retail sales and New Zealand business confidence numbers.

Australian dollar momentum

The AUD/NZD price rallied sharply as investors reacted to the latest Australian retail sales data. According to the bureau of statistics, the country’s retail sales declined from 0.9% in May to 0.2% in June this year. This sharp decline was worse than the median estimate of 0.5%. The bureau noted that the soaring inflation was having a negative impact on the volume of products that people are buying.

The retail sales numbers came a day after the country published the latest consumer inflation data. Australia’s inflation rose from 5.1% in the first quarter to 6.1% in Q2. This increase was the highest it has been in more than three decades. As such, analysts believe that the Reserve Bank of Australia will continue hiking interest rates in the coming months. It has already hiked several times this month.

The AUDNZD price also reacted to the latest Australia’s import and export price index. The two declined to 10.1% and 4.3% in the second quarter. Meanwhile, business confidence in New Zealand is still under pressure even as it improved from -62.6 to -56.7 in July. The RBA and RBNZ will likely continue hiking interest rates in the coming months.

AUD/NZD forecast

Turning to the daily chart, we see that the Aussie to kiwi price has been in a strong bullish trend in the past few months. The pair managed to move above the important resistance at 1.1170. It has moved above the 25-day and 50-day moving averages. The Relative Strength Index (RSI) has moved above the neutral point of 50.

The pair will likely continue rising as investors target the key resistance level at 1.1200. The bullish trend will continue rising as long as it is above the 50-day moving average. A drop below the support at 1.1100 will invalidate the bullish view.