AUD/NZD drops to lowest since April 20

The surprisingly weak Aussie retail sales data pushed the AUD/NZD cross to 1.0643; its lowest level since April 20.

Focus on Australia budget

The budget is likely to focus on delivering on election promises, i.e. infrastructure spending, reduction in the corporate tax rate and housing affordability. The expansionary fiscal policy could help strengthen the Aussie.

However, it is a balancing act for the ruling party as Major ratings agencies have warned that Australia risks losing its coveted triple-A credit rating unless the government can reduce deficits.

AUD/NZD Technical Levels

A break above 1.0676 (100-DMA) would expose 1.0724 (5-DMA) and 1.0761 (Apr 7 low). On the lower side, breach of support at 1.0593 (200-DMA) would open up downside towards 1.0572 (Jan 11 high) and 1.0551 (Jan 23 high).