AUD/NZD - ‘Death Cross’ failure ahead of the RBA decision

Speculation that the RBA might turn hawkish and an upbeat Aussie retail sales release this Tuesday morning pushed the AUD/NZD cross to a more than two-week high of 1.0551, despite the 'Death Cross’ - (bearish crossover between 50-DMA and 200-DMA) on the daily chart. 

RBA expected to keep rates on hold

The central bank is widely expected to keep rates on hold and contrary to the expectations of a few, the bank is also likely to avoid going the ECB-way and retain its neutral stance. So a minor pullback in the AUD/NZD cannot be ruled out if the RBA does retain the neutral stance. 

On the contrary, a hawkish twist would be a surprise and thus would strengthen the bid tone around the Aussie dollar. 

Read - When is the RBA interest rate decision and how might it affect AUD/USD? & AUD/USD analysis: no hawkish surprises expected from the RBA

AUD/NZD Technical Levels

The cross was last seen trading around 1.0550. A break above 1.0594 (50-DMA) would expose 1.0611 (200-DMA) and 1.0642 (Apr 20 low). On the lower side, breach of support at 1.0535 (June 29 high) could yield a pullback to 1.0502 (5-DMA) and to 1.0457 (10-DMA). 

The daily RSI has moved above 50.00, suggesting scope for further gains. The chart also shows the recent rally has been based on the bullish price-RSI divergence.