AUD/NZD: key FX pair for next week
Fawad Razaqzada February 3, 2017 1:22 PM
Next week is all about the Australian and New Zealand dollars. We will hopefully find out which of the two currencies is stronger relative to the other one as central banks of both nations have their policy decisions. In addition, we will hear from governors of both the RBA and RBNZ, not to mention there will be some important data from the region. The volatility in the AUD/NZD therefore should go up by a good few notches. I think at the moment the RBNZ is a touch more dovish than the RBA, so I therefore expect the AUD/NZD to rise in the coming weeks.
Next week’s key fundamental events from the two nations, among other things, include:
- Monday: Australian Retail Sales, ANZ Job Advertisements and AIG Construction Index
- Tuesday: NZ Inflation Expectations; RBA interest rate decision & policy statement and GDT Price Index
- Wednesday: (Thurs morning NZ time): RBNZ interest rate decision, RBNZ Monetary Policy Statement and RBNZ Press Conference
- Thursday: Speeches from Governors of RBNZ (Wheeler) and RBA (Lowe)
- Friday: RBA Monetary Policy Statement
So the economic calendar is jam-packed with data from both nations. It will be almost impossible for traders to predict every fundamental move correctly. But through in technical analysis, the job may become slightly easier. Reaction of price around key levels should provide traders quick feedback if they are right or wrong or about a particular idea. At the moment, the AUD/NZD is basically stuck between a rock and a hard place. Resistance has been provided by the downward-sloping trend line and the 200-day moving average, which is also sloping downwards. The slope of this MA tells us objectively that the trend over the past 200 days have been bearish. Support meanwhile has been provided by the rising trend line. Put another, the AUD/NZD is coiling for a breakout – potentially a big one.
But is the trend turning bullish? Recent price action certainly points that way. So far, two clear attempts from the sellers to push the AUD/NZD below the swing points have failed. Is this telling us that the AUD/NZD has bottomed out? If I was a betting man, I would say that is the case. But I am not. Let’s remain objective and wait for price to tell us if we have seen a bottom. We need to see a break in market structure i.e. when price forms a higher high above 1.0570 or ideally 1.0770 swing high points. Only when this condition is met will the technical outlook turn decisively bullish for the AUD/NZD.
Source: eSignal and FOREX.com.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.