AUD/NZD technical analysis: RBNZ cuts rates, inverse head-and-shoulders breakout likely

• RBNZ cut rates by 25 basis points to 1.5% today. 
• The interest rates in Australia and New Zealand are now at par. 
• The AUD/NZD pair could witness an inverse head-and-shoulders breakout in the next few days.

With the Reserve Bank of New Zealand's (RBNZ) decision to cut rates by 25 basis points to 1.5%, the NZD no longer has the yield advantage over the Aussie dollar.

As a result, the AUD/NZD pair could rise above 1.0750 in the next few days, confirming an inverse head-and-shoulders breakout or a bearish-to-bullish trend change on the daily chart.

As of writing, the pair is trading at 1.0670, having hit a high of 1.07235 earlier today. The 14-day relative strength index (RSI) has bounced up strongly from 50.00 in favor of the bulls.

Technically speaking, the bullish case would weaken if the spot finds acceptance under 1.05280 (May 6 low). Also, the breakout may remain elusive China trade data, due later today, disappoints expectations, weakening the bid tone around the AUD, a proxy for China. 

Daily chart

Trend: Bullish above 1.0750