16 Jan 2014
AUD/NZD enters LT 1.06 support, bottom pickers to try luck?
FXstreet.com (Bali) - The most notorious trend over 2013, and one that appears to have no end in sight in the early going of 2014 is the AUD/NZD, which just saw a sharp sell-off leading to break the 1.06 area.
Australia vs New Zealand: Fundamentally 2 different worlds
The dismal jobs report out of Australia has reinforced the conviction by the market that both the Australian and New Zealand economies seem to be headed in opposite direction, the first suffering the effects of an economic transition from mining into other sectors, while the latter keeps showing spectacularly firm indicators, with business confidence at 20-yr high, and the RBNZ about to hike rates soon.
AUD/NZD chart analysis
From a technical standpoint, the 1.06 support is an important level to consider, as past historic NZD gains back in 2004 through 2008 (last time tested) came to an end, always around this area. However, what is different this time, from an order flow perspective, is the fact that the NZD flow has been building in a steadily consistent fashion, not being an episode of a flight to panic/risf-off of sorts, but more based on real fundamentals, thus why bottom pickers should be cautious.
Australia vs New Zealand: Fundamentally 2 different worlds
The dismal jobs report out of Australia has reinforced the conviction by the market that both the Australian and New Zealand economies seem to be headed in opposite direction, the first suffering the effects of an economic transition from mining into other sectors, while the latter keeps showing spectacularly firm indicators, with business confidence at 20-yr high, and the RBNZ about to hike rates soon.
AUD/NZD chart analysis
From a technical standpoint, the 1.06 support is an important level to consider, as past historic NZD gains back in 2004 through 2008 (last time tested) came to an end, always around this area. However, what is different this time, from an order flow perspective, is the fact that the NZD flow has been building in a steadily consistent fashion, not being an episode of a flight to panic/risf-off of sorts, but more based on real fundamentals, thus why bottom pickers should be cautious.