The Australian dollar will be in focus this week as the Reserve Bank of Australia (RBA) delivers its second decision of the year. The AUD/NZD exchange rate jumped to a high of 1.0885 while the AUD/USD price consolidated at 0.6755.
RBA interest rate decision
The RBA will conclude its two-day meeting on Tuesday morning and deliver its decision. Economists polled by Reuters expect the bank to maintain its hawkish sentiment since inflation remains at an elevated level.
The RBA will hike rates by 0.25% for the tenth straight meeting and bring the headline interest rate to 3.25%. This view is in line with what other central banks have done in the past few months. In the United States, the Fed has hiked rates by 450 basis points. The European Central Bank (ECB) and the Bank of England (BoE) have also hiked rates.
Recent economic numbers point to the need for more interest rate hikes in the coming months. The unemployment rate remains close to a multi-decade low while inflation remains at a historic high. Still, the main catalyst for the AUD/USD and AUD/NZD will be the RBA’s outlook for the future.
As I wrote here, minutes by the RBA showed that the bank will continue hiking interest rates in the coming months. Therefore, a change of tune will have an impact on the Australian dollar. Some analysts expect that the bank will point to a rate cut later this year.
AUD/USD forecast
The daily chart shows that the AUD/USD exchange rate has been in a bearish trend in the past few days. This decline happened after the pair formed a double-top pattern at 0.7137, whose neckline is at 0.6165. It is now forming a bearish flag pattern while the 25-day and 50-day exponential moving averages (EMA) have made a bearish crossover pattern.
Therefore, the pair will likely have a bearish breakout in the coming days. This view will be confirmed if it moves below the key support at 0.6685. This is a notable level since it is along the right shoulder of the inverted head and shoulders pattern. A bearish breakout will see it drop to the key support at 0.6600.
![AUD/USD](https://invezz.com/wp-content/uploads/2023/03/audusd-1-1024x500.png)
AUD/NZD forecast
The AUD/NZD price made a bearish breakout last week. This decline happened after the pair formed a rising wedge pattern. In price action analysis, this pattern is usually a bearish sign. It has moved below the 25-day and 50-day moving averages. The pair has moved to the 38.2% Fibonacci Retracement level.
Therefore, the pair will likely continue falling as sellers target the key support level at 1.0700. A move above the key resistance point at 1.0950 will invalidate the bearish view.
![AUD/NZd chart](https://invezz.com/wp-content/uploads/2023/03/audnzd-1024x500.png)
Source: https://invezz.com/news/2023/03/06/aud-nzd-aud-usd-forecast-ahead-of-the-rba-rate-decision/