Australia, New Zealand dollars stall as rallies run into resistance
The Aussie slipped 0.1% at $0.6481 after having retreated from a six-month peak of $0.6537 overnight when it finished 0.1% lower.
There's now stiff resistance at $0.6515 while solid support lies at its 200-day moving average of $0.6447.
It has surged 10% since early April. The kiwi dollar eased 0.2% to $0.5988.
It hit a six-month top of $0.6031 overnight and finished 0.2% higher.
Resistance is strong at $0.6029, with support at the 200-day moving average of $0.5877.
Overnight, the sell-off in the US dollar steadied a little after US President Donald Trump flip flopped again on his latest tariff threat against Europoe.
That helped the two Antipodeans break higher but ultimately they were not able to hold onto the gains in a holiday thinned session.
'We have a constructive view on both antipodean currencies, but it is fair to say that near term the AUD is finding it difficult to sustain breaks above 0.65 while the kiwi is facing resistance around the 0.6030 area,' said Rodgrigo Catril, senior FX strategist at the National Australia Bank. The next catalyst is most likely to be a central bank policy decision in New Zealand on Wednesday.
The RBNZ is widely expected to cut interest rates to 3.25%, though uncertainty remains about where rates will bottom. Swaps imply a quarter-point rate cut has been fully priced in, with rates set to hit 2.85% later this year.
Australia, New Zealand dollars gain but face stiff chart resistance
'We see the RBNZ's OCR profile being revised down by around 20bp to around 2.9% by the end of 2025. A broadly flat profile beyond 2025 seems likely,' said analysts at Westpac. 'The very short term assumption for Q3 2025 is likely to leave the RBNZ the option to cut the OCR in either of July or August.'
Australian monthly inflation data is also due on Wednesday and analysts are expecting the monthly rate to have eased to 2.3% in April from 2.4% the previous month.
The report is heavily focused on goods rather than services in the first month of the quarter, and usually does not have a significant bearing on policy rates.
A rate cut from the Reserve Bank of Australia in July is now priced at a 67% probability, with a total of 80 basis points in easing expected by early next year.
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