TD Research discusses AUD/NZD strategy and promotes fading rallies towards 1.10.
"We prefer to sell into rallies and look to get short ahead of 1.10. Besides the global macro risks, this week brings a few data releases in both Australia and New Zealand. We look for an upbeat capex report out of Australia, which could offer the cross some room to push higher
Our positioning indicators also show that the market has increased its short exposure to NZD - adding a modest long in AUD. The shakeout from Italy should continue to set the tone that should offer the cross some room to grind higher, offering better levels to sell," TD argues.