AUD/NZD in bullish territory while RBA Lowe maintains that rates are on hold

• AUD/NZD upside in focus towards 1.05 handle as RBA underpins on hold bias. 
• Philip Lowe is currently appearing before the House of Representatives Economics Committee.

AUD/NZD has been holding in a bullish environment on the 1.04 handle with prospects to te 1.05 handle following the Reserve Bank of Australia holding this time around and pausing after 75bps of easing in 2019, signalling that rats are on hold by leaving its growth forecast unchanged with a cautiously upbeat view.

• RBA Lowe: Coronavirus risks to Australia greater than SARS

RBA's governor, Philip Lowe, is currently appearing before the House of Representatives Economics Committee to discuss the outlook for the economy where markets are looking to the risks to the central view. He has emphasised that the unemployment is critical and should have been going the other way, rate cuts would be on the cards. 

RBA has signalled a long pause is likely

"The RBA has signalled a long pause is likely. Governor Lowe reinforced this recently. Interestingly, the RBA opted to leave its growth forecast unchanged and instead take on a cautiously upbeat view with recent interruptions from the virus and global trade as temporary. Markets seem to have embraced this too," analysts at Westpac explained. AUD can be supported in this regards and it puts a heavy emphasis on the unemployment rate and next month's job report. 

Meanwhile, we will have the Reserve Bank of New Zealand, we have the inflation expectations out a little later today, 0200GMT. This will come ahead of the central bank meeting on the 14th where rates are expected to be left on hold. 

"We have already dabbled in tactical AUD longs vs GBP. AUD should regain its footing vs. low funders should risk stabilize further. We now think a case is building for AUDNZD topside as the pair managed to hold crucial support near 1.03," analysts at Westpac argued who note that a temporary shock from the virus offers AUD a competitive advantage over NZD.

"We will look to buy AUDNZD on a dip towards 1.0350/1.0400. The 200dma at 1.0555 will be the gateway to a larger move towards 1.08/1.09."

AUD/NZD levels