AUD/NZD: On the brink of a major bullish breakout above 1.1470 as RBNZ remains dovish

[Redator]

Key takeaways

• AUD/NZD nears breakout: The pair rallied 1.10% since 6 October 2025, approaching the key long-term resistance at 1.1470.
• RBNZ turns more dovish: The central bank cut its cash rate by 50 bps to 2.5%, signaling openness to further easing to boost demand.
• Yield spread widens: The AU–NZ 10-year bond yield spread expanded to 0.16%, reinforcing bullish momentum for AUD/NZD.
• Technical setup remains strong: Uptrend within a medium-term ascending channel; breakout above 1.1470 could target 1.1510 next.

This is a follow-up analysis and timely update of our prior report, “AUD/NZD: Bullish en route towards a 10-year high at 1.1470 with a less dovish RBA”, published on 30 September 2025.

Since our last analysis, the price actions of the AUD/NZD cross pair have staged the expected up move and rallied by 1.10% from Monday, 6 October 2025 low of 1.1320 to print a current intraday high of 1.1446 on Wednesday, 8 October 2025, just a whisker below the key resistance of 1.1470.

RBNZ maintained dovish monetary policy guidance with a larger 50 bps rate cut

The bulk of the bullish movement seen in the AUD/NZD since the start of this week has come today, exuberated by a much more dovish New Zealand central bank.

The RNBZ cut its short-term official cash rate by 50 basis points, more than the median consensus forecast of a 25-bps cut to 2.5% from 3%. It is the eighth rate cut by the RBNZ since it kick-started its current interest rate-cutting cycle in August 2024 from 5.50%. Today’s rate cut brought the official cash rate to its lowest level since mid-2022.

The RBNZ’s latest monetary policy statement signalled its commitment to maintaining a dovish stance, expressing willingness to continue monetary easing and openness to further rate cuts aimed at stimulating demand, while placing less emphasis on immediate inflation risks.

A further steepening of the AU/NZ sovereign yield spread supports AUD/NZD bulls

Fig. 1: AU & NZ unemployment rate with yield spreads of AU/NZ government bonds as of 8 Oct 2025 (Source: TradingView)

The more dovish monetary policy guidance from the RBNZ than its antipodean counterpart has triggered a further steepening of the 2-year and 10-year yield spreads between Australian and New Zealand sovereign bonds.

Currently, the 10-year spread with a longer tenure has just broken above its October 2024 peak of 0.12% and is trading at 0.16% at the time of writing.

Hence, the 2-year and 10-year yield spreads between Australian and New Zealand sovereign bonds are likely to widen further, which in turn could propel a further bullish movement in the AUD/NZD cross pair.

Let’s now focus on the short-term (1to 3 days) trajectory, key elements, and key levels to watch on the AUD/NZD from a technical analysis perspective.

Fig. 2: AUD/NZD minor trend as of 8 Oct 2025 (Source: TradingView)

Fig. 3: AUD/NZD long-term secular trend as of 8 Oct 2025 (Source: TradingView)

Preferred trend bias (1-3 days)

Maintain bullish bias in any minor setbacks for the AUD/NZD with adjusted short-term pivotal support at 1.1370. A clearance above the key long-term secular resistance of 1.1470 may trigger a further bullish acceleration towards the next intermediate resistance at 1.1510 (also a Fibonacci extension) in the first step.

Key elements

• The price actions of the AUD/NZD have continued their upward movement within a medium-term ascending channel in place in place since the 20 August 2025 low (see Fig. 2).
• The upper boundary of the medium-term ascending channel will be projected as a resistance at 1.1510 for the AUD/NZD (see Fig. 2).
• The hourly RSI momentum indicator of the AUD/NZD has reached an extreme overbought level of 83 at the time of writing, but without any bearish divergence condition. These observations suggest that the AUD/NZD is likely to see a minor pull-back first below 1.1435 at this juncture before its next bullish impulsive up move sequence materialises (see Fig. 2).
• The 1.1470 long-term secular resistance of the AUD/NZD is defined as the upper limit of a 10-year-plus bullish basing configuration in place since April 2015 (see Fig. 3).
• In addition, the monthly MACD trend indicator of the AUD/NZD has continued to drift higher above its centreline after a retest of its ascending channel support. This observation suggests the potential start of a long-term secular bullish trend for the AUD/NZD, which increases the odds of a major bullish breakout above 1.1470 (see Fig. 3).

Alternative trend bias (1 to 3 days)

A break below the 1.1370 key short-term support for AUD/NZD negates the bullish scenario to expose the next intermediate support at 1.1330/1.1320 (also close to the lower boundary of the medium-term ascending channel).

Opinions are the authors'; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. The provided publication is for informational and educational purposes only.
If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please refer to the MarketPulse Terms of Use.
Visit https://www.marketpulse.com/ to find out more about the beat of the global markets.
© 2025 OANDA Business Information & Services Inc.