AUD/NZD Buyers Push for Further Gains Amid Market Optimism

Market Overview

The Australian dollar (AUD) is gaining traction against the New Zealand dollar (NZD) as optimism over China’s economic stimulus measures helps offset concerns about the impact of US tariffs on imported steel. However, the sustainability of AUD’s strength remains uncertain, particularly as China’s weak inflation data suggests that economic pressures could limit further upside.

With Australia’s economic calendar featuring key business confidence data this week, market participants are closely watching whether positive sentiment in the economy can sustain the recent AUD rally.

Technical Analysis

The AUD/NZD pair has maintained a mild upward trajectory, trading near a key four-hour resistance level. Buyers are attempting to break 1.10916, a previous high that could unlock further upside potential. If buyers push through 1.10916, the next resistance targets are 1.11025, 1.11163, and 1.11315.

Momentum indicators support the bullish outlook, with RSI above 50 and approaching 70, signaling strong buying pressure. MACD bars remain above zero, reinforcing the bullish trend.

However, failure to sustain momentum could invite selling pressure.

Key Technical Levels

• Resistance: 1.10916, 1.11025, 1.11163, 1.11315
• Support: 1.10764, 1.10517

If 1.10764 breaks, sellers could attempt to drag the pair towards 1.10517, which would invalidate the short-term bullish setup.

Fundamental Drivers Affecting AUD/NZD

AUD Strength Supported by China’s Economic Measures

The Australian dollar has found support amid speculation that China will introduce further stimulus to counter economic weaknesses.

Recent measures have stabilized investor confidence, reducing the negative impact of US trade tariffs on China. Australia’s economic reliance on China has helped lift AUD despite soft Chinese inflation figures.

New Zealand Dollar Lags Amid Limited Market Catalysts

The NZD remains subdued, with limited domestic catalysts to drive demand. While the Reserve Bank of New Zealand (RBNZ) has maintained a cautious policy stance, recent weak trade data has weighed on the currency. With China’s economic recovery uncertain, NZD’s performance remains vulnerable to external risks.

Conclusion

AUD/NZD remains bullish, with buyers targeting 1.10916 and higher resistance levels. A break below 1.10764 could shift momentum in favor of sellers. This week’s Australian business confidence data will be a key catalyst for the next directional move.

• share