Last week the news came out from RBNZ(Reserve Bank of New Zealand) that they if required will move towards Negative Rates. Due to the strength of the currency, their aim is to control the currency value by weakening it.
In last meeting, RBA (Reserve Bank of Australia) clearly mentioned that they are unlikely to go for negative Rates they deny that due to bull run the AUD is overvalued. Hence, what do we have?
RBNZ: NIRP In view & to week currency.
RBA; No NIRP& Not overvalued.
Here we see a clear divergence in RBA & RBNZ. Technically on a weekly chart, a supply trend line with R2 year can be seen.
The trend line is in confluence with Fibonacci ABCD 127% 1.11xx.
This is a weekly time frame analysis.
It may a few weeks to mature.
How ever, if the divergence in between RBNZ & RBA is somehow reversed then the above setup may negate and bounce back forming a Double top.
Source “TASK SOLUTIONS (PVT) LTD”