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11 Feb 2014
AUD/NZD a squeeze higher yet still to come?
FXStreet (Guatemala) - AUD/NZD has been a squeeze higher on the bid until meeting supply into Asia opening at 1.0830
The AUD is recovering and strategists at RBS explained that the RBA was somewhat less dovish as they had expected. “The details behind the Monetary Policy Statement (MPS) were also more upbeat, consistent with the RBA moving to a neutral stance on rates from a dovish stance. Risks were assessed to be fairly balanced, suggesting that the central bank believes rates are close to having reached a bottom. The RBA hence looks firmly on hold for the time being”. Last week's much stronger than expected trade data, stability in emerging markets and the shift in tone from the RBA are all potential AUD supports. Economic surprises have been in line with their historical average, so there is scope for further good news to be priced into the AUD, starting with this week's employment report. At the same time, NZD upside continues to look more fully priced, with interest rate markets having priced in rate rises at the next two meetings. This limits the scope for NZD gains on yields alone”. They suggested to stay long AUD/NZD.
AUD/NZD neutral
RSI (14) for the pair is neutral and signifies or at least underlines the freedom the pair has either way. The technical are very much neutral. Meanwhile, longer term, the pair comes with a bullish bias and has severed the daily downtrends resistance line.
The AUD is recovering and strategists at RBS explained that the RBA was somewhat less dovish as they had expected. “The details behind the Monetary Policy Statement (MPS) were also more upbeat, consistent with the RBA moving to a neutral stance on rates from a dovish stance. Risks were assessed to be fairly balanced, suggesting that the central bank believes rates are close to having reached a bottom. The RBA hence looks firmly on hold for the time being”. Last week's much stronger than expected trade data, stability in emerging markets and the shift in tone from the RBA are all potential AUD supports. Economic surprises have been in line with their historical average, so there is scope for further good news to be priced into the AUD, starting with this week's employment report. At the same time, NZD upside continues to look more fully priced, with interest rate markets having priced in rate rises at the next two meetings. This limits the scope for NZD gains on yields alone”. They suggested to stay long AUD/NZD.
AUD/NZD neutral
RSI (14) for the pair is neutral and signifies or at least underlines the freedom the pair has either way. The technical are very much neutral. Meanwhile, longer term, the pair comes with a bullish bias and has severed the daily downtrends resistance line.