The AUDNZD pair is clearly going up further and is at its highest since July 2018, breaking through the August 2020 peaks. The Australian dollar is gaining strongly against the New Zealand dollar after the RBA’s decision to raise interest rates more than expected. The market had priced in only a 15 basis point hike, which would have brought the interest rate to 0.25%. However, the RBA decided to raise to 0.35%. Interestingly, the RBNZ has already raised rates 4 times in a row, bringing the main interest rate to 1.5%. The RBA is one of the last banks in the developed economies that decided to raise interest rates. The bank indicates that further are more than possible to bring inflation back to target. The Australian dollar also gets support from strong commodity prices, particularly iron ore.
The Australian dollar is not very strong against the US dollar in recent times, which in turn is waiting for a double hike from the Fed. On the other hand, in the case of the AUDNZD pair, we are looking at a breakout of the 1.1050 level. If such high levels are maintained in the next few sessions, we can expect an attempt to go further to the key supply zone around the 1.1300 level. Otherwise, the key support zone is located around the 1.08-1.09 level.