AUD/NZD trims gains ahead of the RBNZ's rate decision

• AUD/NZD is trading below the 100-day MA.
• RBNZ is expected to keep rates unchanged today.
• Markets expect the RBNZ to cut rates in July.

AUD/NZD is currently trading at 1.0490, having hit a high of 1.05 earlier today. The currency pair has found acceptance below the 100-day moving average (MA) for the first time since April 3.

The Reserve Bank of New Zealand (RBNZ) widely expected to maintain its current cash rate of 1.50%, having reduced its base rate by 25 basis points last month. 

The recent economic data releases have shown that New Zealand's economy is hardly suffering at all and does not warrant a series of rate cuts, as noted by FXStreet's Joseph Trevisani. As a result, the odds of RBNZ striking an outright dovish tone are quite low.

That said, markets are priced in for an RBNZ rate cut in July. Even so, the AUD/NZD pair could continue to lose ground as the markets expecting the Reserve Bank of Australia (RBA) to cut rates by 50 basis points before the year-end.

The bias, however, would flip in favor of the AUD if the RBNZ sounds dovish, forcing markets to price in the possibility of one more rate cut after July.

Pivot levels