AUD/NZD Tests Key Resistance Amidst Diverging Narratives

The AUD/NZD currency pair has rallied into a key resistance zone on the daily chart, following a strong economic performance in Australia and a sell-the-fact reaction to the Reserve Bank of New Zealand's rate hike.

Australia's Q2 GDP beat expectations with a stronger than expected print, while the RBNZ's fully priced 25bp hike triggered a kiwi selloff even though the headline decision matched expectations.

New Zealand's terms of trade index fell 9.0% on the previous quarter, a far steeper decline than economists had forecast, adding to the pressure on the NZD.

The rally has been driven by the combination of these factors, with neither data release large enough in isolation to force a decisive break of the resistance level.