AUDNZD Technical Analysis

In this article we will be looking at the AUDNZD technical analysis. The Aussie dollar continued to be sold off as there continues to be speculation that the RBA may shave off the interest rates at their next meeting which is scheduled in February next year. Economists from Deutsche bank, Goldman and Westpac have suggested that the RBA might carry out a rate cut of 0.25 to 0.5%. Tomorrow we would see the RBA releasing its minutes from the December meeting and any hints of the rates being cut could see the Aussie dollar losing value to other currencies like the Kiwi.

AUDNZD Technical Analysis

AUDNZD Technical Analysis

The central bank of New Zealand on the other hand surprised the markets when it announced that it is maintaining its hiking bias and it has also hiked its growth forecasts. The interest rates for was left untouched at 3.5% but the hawks in the Reserve Bank of New Zealand are confident about more economic growth for the country with domestic demand gaining good momentum. For 2014, the GDP growth have been revised up from 3.1% to 3.2% and the numbers are expected to remain elevated with a forecast of 3.5% in 2015. Growths for the years 2016 and 2017 is also expected to remain above the 3% level and this have given the Kiwi bulls a reason to retain their confidence in the currency.

Nevertheless, the AUDNZD might see some retracement to the upside in the following days and the Stochastic indicator have been in the oversold region for quite some time now. Although there is room for some retracement before continuation to the downside, I wouldn’t advise anyone to go bullish just yet but rather look at shorting the pair at higher levels, especially if a price action signal or set up appears that warrants one to consider a short position.

On the upside, the pair might test the bottom of the channel that it broke out form which is the 1.075 level. A bearish candlestick at that level could allow us to consider a short position to follow this down trend. However, a stop loss around the 1.088 to 1.092 area would be useful in preserving your capital just in case this pair decides to retrace higher.

To your Forex Trading Success!

~ Ardy

Singapore Forex Trading Blog