AUDNZD has formed lower highs connected by a falling trend line on its hourly time frame, with price gearing up for a pullback to the resistance near the Fibonacci retracement levels.

The 38.% level appears to be holding as resistance around the 1.1050 minor psychological mark while the 50% Fib is close by at 1.1060. A larger pullback could reach the 61.8% Fib closer to the trend line and 200 SMA dynamic inflection point.

The 100 SMA is below the 200 SMA to indicate that the path of least resistance is to the downside or that the selloff is more likely to gain traction than to reverse. In that case,  AUDNZD could soon make its way back to the swing low at 1.1012 or lower.

Stochastic is heading down after reaching the overbought zone, indicating that bearish pressure is picking up and that sellers could stay in control for much longer. RSI is also on the move down to indicate that sellers have the upper hand and could keep the downtrend going until oversold conditions are met.

AUDNZD appears to be bogged down by trade concerns weighing on the Chinese economy, as higher US tariffs have been imposed and the country has responded with countermeasures. This could impact the Australian economy more than New Zealand’s, potentially weighing on growth prospects and keeping the RBA dovish.

Recall that the RBA already cut rates in their latest policy decision and signaled scope for more but warned that they are taking a more gradual approach to future easing moves. Meanwhile, the RBNZ also cut interest rates in their latest policy statement and pointed to a slower pace of easing down the line.

Further tariffs on China and other trade partners could keep risk-taking in check, possibly weighing more on AUD than NZD while risk-off flows are in play.