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12 Mar 2014
AUD/NZD testing 1.06 but lacks conviction
FXStreet (Guatemala) - AUD/NZD squeezes are failing to gain any traction and range trading is persisting on the 1.06 handle.
AUD/NZD came under pressure on China and has attempted to challenge the downside meeting the 1.06 handle. The AUD is however holding up to to a degree as RBS strategists noted, “Most of the data out of Australia over the last two weeks has been significantly stronger than expected, challenging the view of many market economists and the RBA that growth will remain below trend this year and unemployment will continue to rise until the first half of next year.” They continued and explained, “A rate hiking cycle is now largely priced in NZD and RBNZ looks well positioned to lose the race not to be first to hike. NZD is around record highs on a trade-weighted basis and its rates market may be regarded as priced for perfection”.
AUD/NZD for 1.0400's?
Tim Riddell at ANZ Research suggested the risk of another slide towards 1.0565-70 seems high after the failure to test 1.0770 and any acceleration below 106.50 could force a full retest of the 1.0435-95 area. Near-term pressures may be to the downside, but a secondary squeeze is still favoured. Again bounces need to clear 1.0770 to force a retest of 1.0950 and possibly 1.1035”.
AUD/NZD came under pressure on China and has attempted to challenge the downside meeting the 1.06 handle. The AUD is however holding up to to a degree as RBS strategists noted, “Most of the data out of Australia over the last two weeks has been significantly stronger than expected, challenging the view of many market economists and the RBA that growth will remain below trend this year and unemployment will continue to rise until the first half of next year.” They continued and explained, “A rate hiking cycle is now largely priced in NZD and RBNZ looks well positioned to lose the race not to be first to hike. NZD is around record highs on a trade-weighted basis and its rates market may be regarded as priced for perfection”.
AUD/NZD for 1.0400's?
Tim Riddell at ANZ Research suggested the risk of another slide towards 1.0565-70 seems high after the failure to test 1.0770 and any acceleration below 106.50 could force a full retest of the 1.0435-95 area. Near-term pressures may be to the downside, but a secondary squeeze is still favoured. Again bounces need to clear 1.0770 to force a retest of 1.0950 and possibly 1.1035”.