Exit AUDNZD longs, re-enter at lower levels – NAB

FXStreet (Delhi) – Gavin Friend, Senior Markets Strategist, suggests that traders should step out of long AUD/NZD trade as the cross had been trading a broad 1.09 – 1.14 range for a few months, it had been looking more negative on a technical basis in recent days, even breaking below the 1.0850 level.

Key Quotes

“The arrival of a mix of negative news for the cross today has left little room for manoeuvre and stops have been triggered in a further breakdown through our 1.0750 stop. That news was lower China CPI data and a hike in one Australian lender’s mortgage rate – which at the margin begs the question for some of whether others lenders follow suit and does this mean the RBA will respond with a cut? In addition comments from RBNZ governor Wheeler that hint at the RBNZ not looking for aggressive rate cuts for here has bolstered the NZD relatively.”

“The breakdown in the cross comes despite the notion that the Australian economy is starting to show increased signs of a recovery in the non-mining sector which all things being equal should see investors pare back rate cut expectations. Thus we may look to re-enter a long at lower levels.”

Gavin Friend, Senior Markets Strategist, suggests that traders should step out of long AUD/NZD trade as the cross had been trading a broad 1.09 – 1.14 range for a few months, it had been looking more negative on a technical basis in recent days, even breaking below the 1.0850 level.

(Market News Provided by FXstreet)