AUD/NZD higher on RBNZ hawkish hold

• AUD/NZD rallies through technical resistance with bullis divergemce.
• RBNZ holds but hawkishly so, eyes on presser.

AUD/NZD has rallied on the back of the Reserve Bank of New Zealand holding off from hiking rates so soon as the delta variant hits the nation and forces it into a strict lockdown. 

At the time of writing, AUD/NZD is testing 1.0510/40 ranges in choppy post-decision trade as investors and traders digest the implications for forex and money markets. 

The Reserve Bank of New Zealand (RBNZ) board members decided to maintain the Official Cash Rate (OCR) at a record low of 0.25% in August, as against market expectations of a 25bps hike.

NZD technical analysis

This led to the downfall of the currency as follows:

Against the US dollar, the bird was offered into the support zone that would be expected to hold on first attempts but as the US dollar catches a bid, the ice is thin for a move lower to the next support zone near 0.6750. 

The RBNZ presser will be interesting for markets in this respect for guidance that could add clarity to the decision and help markets to revalue the kiwi in the coming days. 

Meanwhile, AUD/NZD's outlook is as follows:

We have bullish divergence and an engulfing bullish candle within a downtrend. 

The focus is on the 200 smoothed simple moving average as a baseline near 1.0670/80 as long term target as the RBNZ and RBA align and diverge from the Federal Reserve. 

However, near term, the price is breaking the trendline resistance with bullish divergence: