AUD/NZD down to fresh five-week lows on the day

AUD/NZD D1 06-07

In terms of central bank divergence, the RBNZ rate hike calls and RBA policy stance today makes for a stark difference between the two at the moment.

And that could be enough to take AUD/NZD down back to its May lows near 1.0600.

The pair is already breaking to fresh five-week lows now below the 61.8 retracement level of its recent upside move last month @ 1.0681.

That now puts pressure towards the trendline support @ 1.0641 before the 27 May low @ 1.0600 comes back into play for the pair.

With market expectations for a RBNZ rate hike rising and the RBA not expected to budge until November at the earliest, there is a tailwind for the kiwi to stay more supportive against the aussie (lower AUD/NZD) on this front - at least for now.

The big caveat though will be how the RBNZ actually responds to all of this talk of them potentially raising rates by November this year.

If they push back against that, it will stifle any major downside momentum in AUD/NZD that comes from this supposed policy divergence the market is building up right now.