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5 Jun 2014
AUD/NZD dropping below 1.10 handle
FXStreet (Guatemala) - AUD/NZD is trading at 1.0990, down -0.20% on the day, having posted a daily high at 1.1024 and low at 1.0988.
AUD/NZD has lost the 1.10 handle with a slight drop back below with the release of the recent trade data from Australia. There was little reaction to the HSBC China services PMI that lost the 51.00 mark. Raiko Shareef, Currency Strategist at BNZ noted the correction in NZD/USD in late May and relative outperformance of AUD/USD caused the cross to crash out of the range it kept for the better part of two months. “Markets still seem too ready to price in an RBA tightening cycle in H1 2014, and less inclined to take into account a continued decline in AU terms of trade”. He went onto explained that the move in the cross has been unaccompanied by a fall in NZ-AU interest rate differentials, which the cross tends to follow closely. “We expect those differentials to widen in NZ’s favour through the year as the RBNZ continues to hike rates”. As such, they expect a rebound toward 1.0752 in due course.
AUD/NZD Levels
With spot trading at 1.0991, we can see next resistance ahead at 1.1008 (Daily Classic PP), 1.1010 (Hourly 20 EMA), 1.1016 (Daily Open), 1.1024 (Daily High) and 1.1026 (Weekly Classic R1). Support below can be found at 1.0990 (Monthly High), (Weekly High), (YTD High), 1.0988 (Daily Low) and 1.0985 (Daily 200 SMA).
AUD/NZD has lost the 1.10 handle with a slight drop back below with the release of the recent trade data from Australia. There was little reaction to the HSBC China services PMI that lost the 51.00 mark. Raiko Shareef, Currency Strategist at BNZ noted the correction in NZD/USD in late May and relative outperformance of AUD/USD caused the cross to crash out of the range it kept for the better part of two months. “Markets still seem too ready to price in an RBA tightening cycle in H1 2014, and less inclined to take into account a continued decline in AU terms of trade”. He went onto explained that the move in the cross has been unaccompanied by a fall in NZ-AU interest rate differentials, which the cross tends to follow closely. “We expect those differentials to widen in NZ’s favour through the year as the RBNZ continues to hike rates”. As such, they expect a rebound toward 1.0752 in due course.
AUD/NZD Levels
With spot trading at 1.0991, we can see next resistance ahead at 1.1008 (Daily Classic PP), 1.1010 (Hourly 20 EMA), 1.1016 (Daily Open), 1.1024 (Daily High) and 1.1026 (Weekly Classic R1). Support below can be found at 1.0990 (Monthly High), (Weekly High), (YTD High), 1.0988 (Daily Low) and 1.0985 (Daily 200 SMA).