Trading opportunities for currency pair: the AUD/NZD has returned to the support. Some important events for this cross are planned for Tuesday and these events will decide whether the price will return to 1.13 or not. For the moment I’m waiting for a rebound to 1.1075. I’ve come up with a few different scenarios.
Background:
The last AUD/NZD idea I made came out on 14th September. The Aussie broke from the support after the Reserve Bank of New Zealand (RBNZ) dropped its base rate by 0.25% to 2.75%.
With any break in the resistance for closing prices I expected the Aussie to strengthen to 1.1420 and then 1.1565. From the moment the article was published, the AUDNZD rose to 1.1346 (+122 points) over the course of four days and this is where the growth peaked. The buyers didn’t manage to pass the 1.1300-1.1340 support zone.
The New Zealand dollar has been strengthening due to a rise in dairy prices and a stabilisation of Asian stock markets. The Global Dairy Trade (GDT) index has rose over the past three auctions (18.08: 14.8%, 01/09: 10.9%, 15/09: 16.5%).
Current situation
The AUD/NZD has returned to 1.0910. As we can see from the graph, there is a strong support at this level. The price has rebounded from it four times. Using classical technical analysis, we should be considering buying the Aussie dollar. Whether there’ll be a break of 1.0916 or a rebound, we’ll know on Tuesday. There are two important events for the AUD and the NZD planned for Tuesday: the RBA is to convene (6:30 EET) and the 149th Global Dairy Trade (GDT) auction in New Zealand (15:00 EET).
What’s interesting at the moment?
The AUD/NZD closed near an important support. After an eight-day fall, I expect the cross to rebound to 1.1075.
1. If the RBA leaves the base rate unchanged and the GDT index falls, it might be worth waiting for the AUDNZD rate to return to 1.1300.
2. If the RBA keeps rates the same, but the GDT index increases, we’re probably looking at the continuation of sideways movement. In this case, the AUDNZD will rise.
3. If the RBA drops their rate then the only way is down to 1.0755 with a break in the support.
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Attention:
Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial markets. Alpari bears no responsibility whatsoever for any possible losses (or other forms of damage), whether direct or indirect, which may occur in case of using material published in the review.
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