- AUDNZD is still elevated relative to 2-year swap spreads suggesting a move lower towards 1.06.
- Despite RBNZ rhetoric overnight, the FX market is positioned very short of NZD suggesting potential for a rebound
- We enter short AUDNZD at 1.1065, target 1.0625, stop above 1.1230
Our technical analyst believes that the near-term bias for AUDNZD is to the downside. The latest bounce appears to be only corrective and should be capped by the 1.1100-1.1225 range (highs from 9 and 17 September). This should again open a downside move possibly accelerating on a break towards 1.0775 – the 21 July low. This will be re entering the base area completed after leaving an 8 year low at 1.0494 in January.