AUD/NZD jumps to 16-month high, 14-day RSI is overbought

AUD/NZD rose to 1.1034; the highest levels since April 2016 as the Aussie Q2 capex data beat estimates by a wide margin and the offered tone around the NZD/USD gathered pace following the breach of 0.72 handle. 

The 14-day RSI now stands at 73.00 levels, i.e. hovering into the overbought territory. 

The cross bottomed out at 1.0371 on June 22 before staging a stellar rally to 1.10 handle. The gains are largely in line with the rally in gold [one of Australia’s top exports]. 

The latest round of sell-off in the NZD is the result of RBNZ governor Wheeler jawboning the currency. Moreover, Wheeler’s dovish comments on the currency makes RBA a relatively hawkish central bank, although the Australian central bank is likely to jawbone its own currency sooner or later. 

AUD/NZD Technical Levels

The cross was last seen trading just above 1.10 handle. An end of the day close above 1.1019 [Apr 2016 high] would expose 1.1087 [Nov 2015 high] and 1.1119 [falling channel hurdle]. On the downside, breach of support at 1.0963 [session low] could yield a sell-off to 1.0929 [10-DMA] and 1.09 [psychological levels].