• AUD/NZD remains on the front foot, reverses the previous day’s pullback from nine-year high.
• Australia Retail Sales came in better than forecast in August.
• Market sentiment dwindles amid recession woes, hawkish Fedspeak.
• Headlines from China, Europe becomes the key for near-term directions as bulls struggle of late.

AUD/NZD remains firmer around 1.1430, picking up bids of late, as Australia’s Retail Sales favored buyers during early Wednesday. In doing so, the cross-currency pair also ignores the downbeat headlines from China and fears of recession while poking the nine-year high, marked on Monday.

Australia’s Retail Sales rose 0.6% MoM versus 0.4% expected and 1.3% prior, which in turn allowed the Australia dollar (AUD) to cheer hopes of faster rate hikes from the Reserve Bank of Australia (RBA).

On the other hand, the latest comments made by Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr and New Zealand's Finance Minister (FinMin) Grant Robertson, on Tuesday, also favored the AUD/NZD buyers.

RBNZ’s Orr said that the central bank still had some work to do but the tightening cycle was already very mature. After him, "The global economy is a tough place to be at the moment. There are still issues coming out of Europe, obviously, with the war in Ukraine, issues in China," NZ FinMin Robertson said in an interview on state-owned TVNZ, per Reuters.

Above all, fears emanating from European energy crisis and China’s zero-covid policy seem to challenge the AUD/NZD bulls. It should be noted that the World Bank’s (WB) downbeat economic forecasts for China and chatters that the dragon nation called key market players to defend the equities also printed vulnerabilities in the economy of the biggest customer of Australia.

Technical analysis

Overbought RSI conditions challenge the AUD/NZD bulls targeting the late 2013 peak surrounding 1.1660.