⬤ The AUD/NZD saw some wild swings during European trading hours after New Zealand dropped hotter-than-expected inflation numbers. The pair initially dipped toward support following the CPI release but quickly reversed course, showing the Aussie dollar still has plenty of fight left in it. The price chart shows buyers stepping in around the 1.1590 area, trying to prevent any deeper slide.
⬤ New Zealand's Q4 inflation came in slightly above what markets were expecting. Quarterly CPI jumped 0.6% versus the forecasted 0.5%, while annual inflation climbed to 3.1%—pushing it back above the Reserve Bank of New Zealand's 1-3% comfort zone. This marks five straight quarters of rising year-over-year inflation, keeping pressure on policymakers and initially weighing on the currency pair.
⬤ But the inflation-driven dip didn't last long. The Aussie dollar found its footing thanks to solid PMI data, helping AUD/NZD climb back toward 1.1600. The chart shows the pair keeps bumping into this level without breaking through cleanly. Support around 1.1590 has become the line in the sand for what happens next.
⬤ Looking ahead, traders are eyeing the 1.1625-1.1630 zone as the next resistance hurdle. A clean break above 1.1600 would open the door to testing that area, while losing support could send the pair back into consolidation mode. The price action shows just how sensitive AUD/NZD remains to inflation data and the broader economic story playing out across both countries.
