AUD/NZD seesaws below 1.1100 on New Zealand’s data disappointment ahead of RBA

• AUD/NZD bulls struggle to keep reins as traders await key events.
• New Zealand’s quarterly business sentiment gauge slumped to the lowest since early 2020.
• RBA is expected to announce 50 bps rate hike but Rate Statement will be the key.
• China Caixin Services PMI, Sino-American trade updates will also be important for fresh impetus.

AUD/NZD portrays the market’s anxiety ahead of the key monetary policy decision from the Reserve Bank of Australia (RBA) during Tuesday’s Asian session. In doing so, the cross-currency pair pokes a two-week-old resistance line as buyers flirt with the 1.1065 level at the latest.

New Zealand’s quarterly release of the NZIER Business Confidence slumped to the lowest levels since March 2020, to -65% versus -40% expected, during the second quarter (Q2) of 2022.

On the other hand, Australia’s AiG Performance of Construction Index for June also eased to 46.2, below 50.4 prior, whereas S&P global Composite PMI and Services PMI confirmed the 52.6 initial forecasts for June.

It should be noted, however, that hopes of US President Joe Biden’s administration allowing China to get rid of Trump-era tariffs join the recently firmer market sentiment, mainly due to the US holiday, appears to have favored the AUD/NZD bulls of late. Furthermore, an absence of major data/events from New Zealand (NZ) joins hawkish hopes from the RBA to keep buyers hopeful.

That said, The Aussie central bank is up for announcing the third rate hike, expected worth 0.50%, as it struggles to tame inflation fears at home. However, the latest challenges to global economic growth could probe the RBA hawks and hence highlight the importance of today’s RBA Rate Statement.

Also read: Reserve Bank of Australia Preview: Will a 50 bps rate hike rescue AUD bulls?

Technical analysis

AUD/NZD bulls attack a 13-day-old resistance line around 1.1070 while defending the week-start bounce of an upward sloping support line from late April, near 1.0960 by the press time.