AUD/NZD drops to key support after big miss on Aussie GDP

The Australian dollar fell off the cliff, taking the AUD/NZD cross down to key support zone of 1.0410-1.4020 after the data released in Australia showed the annualised Q3 GDP was worst since 2009.

Will it break below 1.0410?

The horrible GDP figure could boost expectations of an interest rate cut in Australia. The pair could take out critical support at 1.0410 if the RBA rate cut bets gather pace ahead of the next week’s Fed.

Moreover, the area around 1.0410 has acted as a strong support since November 30, hence a break lower may trigger a sharp sell-off.

AUD/NZD Technical Levels

A break below 1.0410 would open doors for a sell-off to 1.0364 (Nov 9 low). A violation there would expose 1.0312 (July 8 low). On the higher side, breach of 1.0439 (61.8% of Sep 14 low - Oct 14 high) would shift risk in favor of a re-test of 1.05 (zero figure) and 1.0541 (Nov 7 high).