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AUD/NZD Price Forecast: Retreats below 1.2200 on hawkish RBNZ, weak Australian data

  • AUD/NZD retreats from 1.2286 highs to levels below 1.2200.
  • A hawkish RBNZ and soft Australian CPI figures are hammering the Aussie.
  • The pair approaches the neckline of a Double Top pattern.


The Aussie Dollar (AUD) is dropping sharply against the New Zealand Dollar (NZD) on Wednesday. The pair has lost more than 0.8% so far today, hitting session lows at 1.2173, hammered by a combination of a hawkish hold by the Reserve Bank of New Zealand (RBNZ) and softer-than-expected Australian inflation figures.

The RBNZ left interest rates on hold, as widely expected earlier on Wednesday, but a split monetary policy committee hints at upcoming rate hikes. RBNZ Governor, Anna Breman, who used her casting vote to hold on Wednesday, affirmed that policymakers are concerned about second-round effects on inflation, and that further “OCR increases are likely at coming meetings.”

In Australia, April’s Consumer Prices Index (CPI) showed softer-than-expected inflationary pressures. These figures provide some leeway for the Reserve Bank of Australia (RBA) to wait and see for a clearer assessment of the consequences of the war in Iran, and have prompted investors to pare back hopes of an August rate hike.

Technical Indicator: A potential double top warns of a trend shift

Chart Analysis AUD/NZD


AUD/NZD has lost more than 120 pips on Wednesday and is showing signs consistent with a trend shift. A bearish engulfing candle on the daily chart, and a potential double top at the 1.2285 area are clear indicators that bulls are giving up.

The 4-hour Relative Strength Index (RSI) has slipped to the mid-30s, hinting at persistent downside pressure. At the same time, the Moving Average Convergence Divergence (MACD) indicator has turned slightly negative, reinforcing the notion that sellers are taking control.

Immediate support is located at the 1.2125-1.2135 area, where May 7, 12, and 21 lows meet the neckline of the mentioned double top pattern. Further down, the April 9 and 14 lows, around 1.2045, would come into focus. The double top’s measured target is right below the 1.2000 psychological level. On the upside, in the unlikely case of a break above 1.2285, the 127.2% Fibonacci extension of the April-May rally lies at the 1.2380 area.

(The technical analysis of this story was written with the help of an AI tool.)

Australian Dollar Price Today

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the Canadian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.13%-0.04%0.03%0.05%0.30%-0.65%-0.11%
EUR0.13%0.09%0.15%0.17%0.39%-0.52%0.01%
GBP0.04%-0.09%0.04%0.08%0.32%-0.60%-0.06%
JPY-0.03%-0.15%-0.04%0.02%0.25%-0.67%-0.12%
CAD-0.05%-0.17%-0.08%-0.02%0.23%-0.67%-0.14%
AUD-0.30%-0.39%-0.32%-0.25%-0.23%-0.90%-0.35%
NZD0.65%0.52%0.60%0.67%0.67%0.90%0.53%
CHF0.11%-0.01%0.06%0.12%0.14%0.35%-0.53%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

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Offshore Yuan Returns to Over 3-Year High

The offshore yuan edged higher to around 6.78 per dollar on Wednesday, returning to its strongest level since February 2023, buoyed by encouraging domestic economic data. Industrial profits in China jumped 18.2% year-on-year in January–April 2026, supported by robust demand for Chinese electronics and elevated oil prices linked to Middle East tensions. The figures followed earlier signs of slowing economic momentum reflected in industrial output and retail sales data. Still, gains in the yuan were capped after the People’s Bank of China set the daily midpoint fixing at 6.8291 per dollar, 408 pips weaker than a Reuters estimate. The central bank has consistently guided the fixing below market expectations, a move widely interpreted as an effort to maintain currency stability and prevent excessive yuan appreciation.

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Swiss Franc weakens as renewed US-Iran tensions support the US Dollar

  • USD/CHF gains ground as geopolitical tensions in the Middle East keep the US Dollar supported.
  • Iran warns it “will respond,” accusing the United States of violating the ceasefire in the Hormozgan region.
  • Markets continue to price in higher-for-longer Federal Reserve expectations amid elevated Oil prices.

USD/CHF trades with a mild positive bias on Tuesday as renewed military escalation between the United States (US) and Iran supports the US Dollar (USD), pressuring the Swiss Franc (CHF). At the time of writing, the pair is trading around 0.7850, up 0.30% on the day and snapping a four-day losing streak.

American forces carried out “defensive strikes” in southern Iran on Monday, targeting missile facilities and Iranian boats allegedly attempting to deploy naval mines near the Strait of Hormuz. Meanwhile, Iran’s Islamic Revolutionary Guard Corps (IRGC) claimed it had downed a US MQ-9 Reaper drone after it entered Iranian airspace.

In a statement shared by Iran’s IRIB broadcaster, Iran’s Foreign Ministry accused the United States of violating the ceasefire in the Hormozgan region and warned that Tehran “will respond and will not hesitate to defend itself.”

Despite the renewed military escalation, diplomatic efforts between Washington and Tehran continue. US Secretary of State Marco Rubio said on Tuesday that negotiations over a potential deal with Iran could “take a few days,” while stressing that the Strait of Hormuz “has to be open” and “will be open one way or another.”

The Strait of Hormuz remains largely closed, keeping a geopolitical risk premium embedded in global Oil prices and fueling inflation concerns worldwide. Inflation in the United States has accelerated sharply since the war began, reinforcing expectations that the Federal Reserve (Fed) may keep interest rates higher for longer, with traders increasingly pricing in the possibility of another rate hike by the end of the year.

In Switzerland, inflation rose to its highest level in 16 months in April, though it remains within the Swiss National Bank’s (SNB) 0%-2% target range. The SNB is expected to maintain its current policy stance, as the inflationary impact from higher Energy prices has been partly offset by the strength of the Swiss Franc, which helps make US Dollar-denominated commodities such as Oil cheaper in local currency terms.

Although SNB Vice Chairman Martin Schlegel said last week that the central bank maintains an “elevated willingness” to intervene in foreign exchange markets if necessary.

On the data front, traders will closely monitor the US Conference Board (CB) Consumer Confidence report later on Tuesday, followed by Switzerland’s ZEW Survey – Expectations data for May on Wednesday and the US Personal Consumption Expenditures (PCE) inflation report on Thursday.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD0.09%0.24%0.19%0.13%0.07%0.52%0.28%
EUR-0.09%0.19%0.11%0.07%0.01%0.46%0.20%
GBP-0.24%-0.19%-0.09%-0.12%-0.17%0.28%0.03%
JPY-0.19%-0.11%0.09%-0.05%-0.09%0.33%0.12%
CAD-0.13%-0.07%0.12%0.05%-0.03%0.41%0.16%
AUD-0.07%-0.01%0.17%0.09%0.03%0.44%0.19%
NZD-0.52%-0.46%-0.28%-0.33%-0.41%-0.44%-0.24%
CHF-0.28%-0.20%-0.03%-0.12%-0.16%-0.19%0.24%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

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New Zealand Dollar: Hawkish RBNZ stance supports against US Dollar – DBS

DBS Group Research economist Philip Wee expects the Reserve Bank of New Zealand (RBNZ) to deliver a hawkish hold, prioritising above-target inflation over weak GDP growth and high unemployment. He notes that OIS markets price a 51.5% chance of a July hike, while DBS does not rule out an early move at the May meeting, which could help lift NZD/USD back toward the upper half of its 0.57–0.61 trading range.

RBNZ stance underpins New Zealand Dollar

“The Reserve Bank of New Zealand is widely expected to deliver a hawkish hold during its monetary policy meeting on May 27.”

“However, the RBNZ is likely to prioritise above-target inflation over weak GDP growth and high unemployment.”

“Despite the consensus for the Official Cash Rate to stay unchanged at 2.25%, the OIS market is pricing a 51.5% chance of a 25-bps hike at the July 8 meeting.”

“We cannot rule out the RBNZ surprising with an “early” hike tomorrow.”

“Hence, NZD/USD has the potential to return to the upper half of this year’s trading range of 0.57-0.61, especially if the USD sheds its haven status amid any US-Iran deal to reopen the Strait of Hormuz.”

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Indian Rupee: Gradual stabilisation prospects after oil shock – ING

ING’s Deepali Bhargava argues that India’s fuel subsidies and diversified energy sourcing have contained the inflation and growth impact of higher oil prices, but shifted pressure onto the Indian Rupee (INR). She sees weak capital inflows as the key drag, while improved Real Effective Exchange Rate (REER) metrics and Reserve Bank of India (RBI) reserves should help USD/INR stabilise later in 2026.

Rupee strain as flows stay weak

“India’s fuel subsidies are cushioning inflation for now, and diversified energy sourcing has eased supply pressures. But the strain has shifted to the rupee. Its recent slide reflects deeper structural weaknesses, especially chronically soft capital inflows. Unless those inflows recover, the rupee’s vulnerability is likely to persist”

“The biggest impact of higher global oil prices has been on the currency. This shift is less about an exceptionally large current account deficit and more about flows. While India’s external position is softening, it is far from crisis territory. We expect the current account deficit to widen to around 2.1% of GDP in 2026, up from around 0.5% in 2025, largely due to higher oil prices. Even with Brent averaging $104/bbl in 3Q, our CAD [Current Account Deficit] forecast of around 2% of GDP remains well below levels seen during past stress episodes such as the taper tantrum in 2013, where the current account deficit averaged over 4% of GDP. Yet, the extent of INR depreciation has been unusually large, reflecting weak capital inflows rather than current account imbalances.”

“Since then, however, the adjustment has been swift. The CPI inflation rate has nearly halved to an average 2.5%. The REER has declined by over 12%, bringing it back to levels last seen around 2014. On a broader valuation lens, the INR now sits near the bottom of its six-year REER range, indicating that much of the earlier overvaluation has been unwound.”

“Overall, while near-term pressures persist, the adjustment is already well underway. We expect USD/INR to end the year at 95.50, with risks skewed more towards gradual stabilisation than a disorderly weakening.”

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Australian Dollar: Crowded longs face event risk – Societe Generale

Kit Juckes at Societe Generale highlights that speculative positioning in the Australian Dollar is the largest long since 2013, built despite deteriorating domestic data and lower yields. He argues AUD could rally on a credible cease-fire extension but warns much good news is already priced, suggesting better relative value in AUD/NZD and potential NZD/USD shorts.

Australian Dollar positioning looks stretched

“The currency that is most striking in the CFTC chart, is the AUD.”

“The market built up the biggest long AUD position since 2013, growing it in recent weeks despite a wobble at the start of April.”

“5y yields have fallen by 30bp in recent weeks as the economic outlook has deteriorated and end-2026 rate-pricing has dropped by 20bp this month.”

“If a credible cease-fire extension is agreed, AUD seems bound to rally, but there is a lot of good news hard-wired rather than baked into the current AUD/USD price.”

“AUD/NZD would be more attractive, if it weren’t for the fact that this pair is up 13% in the last year.”

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EUR/USD Price Near-term tone remains bearish as 20-day EMA slopes downwards

  • EUR/USD ticks lower to near 1.1633 as US forces strike at Iranian missile launcher sites.
  • The US military clarified that strikes were in “self-defense” and not meant to dismiss the ceasefire with Iran.
  • US President Trump said that negotiations with Iran are proceeding nicely.

The EUR/USD pair trades marginally lower at around 1.1633 during the Asian trading session on Tuesday. The major currency pair faces slight selling pressure as the US Dollar (USD) attacks some bids due to fears that the United States (US)-Iran negotiations could face a setback.

According to a spokesperson from the US Central Command, US forces ‌conducted strikes in southern Iran on Monday, which were aimed at missile launch sites and Iranian vessels aiming to deploy mines.

However, the US military has clarified that the nature of the strikes was “defensive” and were not meant to end the ceasefire with Tehran.

The event has resulted in a slight recovery in the US Dollar (USD) and a decent one in oil prices. As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades marginally higher to near 99.05.

Meanwhile, US President Donald Trump has stated that negotiations with Iran to end the conflict are “proceeding nicely”, Bloomberg reported.

EUR/USD technical analysis

EUR/USD trades slightly lower at around 1.1635, keeping a bearish near-term bias as spot holds below the 20-day Exponential Moving Average (EMA) at 1.1667.

The pair has been grinding lower from early-month highs, and the subdued Relative Strength Index (RSI) around 45.1 hints at fading bullish momentum rather than oversold conditions, suggesting sellers retain the initiative while buyers remain cautious.

On the topside, initial resistance is defined by the 20-day EMA at 1.1667, and a daily close above this dynamic barrier would be needed to ease immediate downside pressure and open the way to a more meaningful recovery towards 1.1700. On the downside, the pair could resume its downside journey if it drops below the May 21 low of 1.1576. Key support area will be 1.1500.

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Australian Dollar loses traction as US launches self-defence strikes on southern Iran

  • AUD/USD loses ground to near 0.7165 in Tuesday’s Asian session. 
  • US military said it carried out new strikes on southern Iran. 
  • Traders brace for Australia’s April CPI inflation report, which is due on Wednesday. 

The AUD/USD pair trades in negative territory around 0.7165 during the Asian trading hours on Tuesday. The Australian Dollar (AUD) declines against the US Dollar (USD) as renewed tensions between the US and Iran weigh on risk-sensitive currencies.  

The US Central Command said on Monday that it launched new strikes on southern Iran, targeting Iranian missile sites and boats attempting to place mines, per BBC. The US military added that the strikes were taken in “self-defense” and were designed “to protect our troops from threats posed by Iranian forces.”

The attacks came as Iranian foreign ministry spokesman Esmail Baqai said some progress has been made in talks with the US, but a deal to end the conflict “is not imminent.” Uncertainty surrounding the US-Iran peace negotiations could boost a safe-haven currency such as the Greenback and drag the pair lower in the near term. 

Australia’s Consumer Price Index (CPI) inflation report will be released on Wednesday. The headline CPI is expected to show a rise of 4.4% YoY in April, compared to 4.6% in March. On a monthly basis, the CPI is projected to show an increase of 0.6% in April, versus 1.1%. Any signs of hotter inflation in Australia could lift the Aussie against the USD.