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Mar 11 - 05:00 PM
AUD/NZD: At Make Or Break Tech Levels; Long The Cross Still Preferably Than Long AUD/USD - Nordea
First appeared on eFXplus on Mar 11 - 03:30 PM

Nordea Research discusses AUD/NZD outlook and maintains promoting long the cross (see here) but flags the risk of breaking below its recent key technical levels.

"AUD/NZD is at make it or break it levels, as a break below the 1.0330-1.0350 range may constitute a negative technical game-changer with thin air below for the pair.

Usually we consider a AUD/NZD position a fairly pure relative monetary policy bet, but recently the RBNZ expectations have “caught down” vis-à-vis RBA expectations, without a subsequent AUD/NZD rebound," Nordea notes. 

"The anticipated “setback” in US/Chinese negotiations may be one reason why, the other being that many (if not all) analysts from AUD following research houses have adopted a very dovish forecast for RBA over the recent few weeks. Yes, the domestic Australian outlook is not good, but isn’t it priced in by now?

We still find (way) too many troublesome domestic factors for AUD to become bullish versus e.g. the USD, but a long AUD/NZD position is a semi-shielded way of betting on a positive Chinese surprise," Nordea adds. 

Source:
Nordea Research/Market Commentary

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