Chart of the day - AUDNZD (16.08.2021)

While market attention is increasingly tied to the US dollar, due a potential tapering, this week's increased volatility may be seen on the AUDNZD pair. On Tuesday, the minutes of the last RBA meeting will be published, while on Wednesday the RBNZ decision, where interest rate hikes are expected! Of course, the raise itself may lead to profit taking of the New Zealand dollar. On the other hand, if a series of hikes is announced, NZD could strengthen even more.

Additionally, it is worth noting that the latest data and the situation on the global markets do not support AUD. First of all, industrial production in China increased by only 6.4% YoY against the expectation of 7.8% YoY and at the previous level of 8.3% YoY. As one can see, the pace of recovery in China is slowing down, so without any government intervention, Chinese-related assets may remain under pressure.

AUDNZD pair is approaching November lows and the 61.8 Fibonacci retracement. Nevertheless, continuation of the downard move towards 1.03-1.035 cannot be ruled out. This zone is marked with previous price reactions. Source: xStation5