23 Sep 2013
AUD/NZD shy’s from yearly lows
FXstreet.com (London) - AUD/NZD has breached the descending trend line through 1.1240 and reached a high of 1.1287 before offers capped the bounce.
Adarsh Sinha, strategist at Bank of America Merrill Lynch, said that they have been been strategically bullish on NZD vs. AUD. “We expect the kiwi's outperformance to continue, albeit at a slower pace”. They explained that there is limited evidence that NZD positioning or valuation is stretched, although New Zealand's cyclical and commodity price outperformance seems appropriately priced in at these levels. “The Reserve Bank of New Zealand (RBNZ) may be concerned about the TWI approaching its highs but we think it will find it difficult to credibly talk down the NZD given its generally hawkish policy stance”. Meanwhile, an Aussie rebound is only going to challenge the RBA and could be limited on such risk.
AUD/NZD Levels
AUD/NZD RSI (14) reads 55.24 while indicators are offering a positive bias for the pair in the short term. 1.1288/90 comes in as next resistance before the psychological 1.1300 handle. 1.1320 /30 acts as target to the upside as last Thursdays constructive double top. Otherwise, failure of the pivot at 1.1243 opens 1.1200 the figure and would challenge yearly lows.
Adarsh Sinha, strategist at Bank of America Merrill Lynch, said that they have been been strategically bullish on NZD vs. AUD. “We expect the kiwi's outperformance to continue, albeit at a slower pace”. They explained that there is limited evidence that NZD positioning or valuation is stretched, although New Zealand's cyclical and commodity price outperformance seems appropriately priced in at these levels. “The Reserve Bank of New Zealand (RBNZ) may be concerned about the TWI approaching its highs but we think it will find it difficult to credibly talk down the NZD given its generally hawkish policy stance”. Meanwhile, an Aussie rebound is only going to challenge the RBA and could be limited on such risk.
AUD/NZD Levels
AUD/NZD RSI (14) reads 55.24 while indicators are offering a positive bias for the pair in the short term. 1.1288/90 comes in as next resistance before the psychological 1.1300 handle. 1.1320 /30 acts as target to the upside as last Thursdays constructive double top. Otherwise, failure of the pivot at 1.1243 opens 1.1200 the figure and would challenge yearly lows.