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Forex: AUD/NZD sits above 1.20 ahead of RBA

FXstreet.com (Barcelona) - With Japanese markets again open for trade and ahead of a big day for Aussie, AUD/NZD still sits close to the fresh 3.5-year lows printed yesterday in early trade barely above the 1.20 handle, last at 1.2046, with both AUD and NZD weakness. NZD/USD holds above the key 0.85 area but slightly into the negative for the week so far, while AUD/USD has been heavily sold off since the start of the week.

Today's Australian trade balance at 01:30 GMT (and HPI) will be a key risk event ahead of main event for the day and probably the week in the form of RBA rate statement, where some market participants are expecting a possible rate cut, that in case it does not come today, it will do in June, analysts say. Prior to this will come AIG construction index at 23:30 GMT for Australia, while Labor cost index for New Zealand at 22:45 GMT.

IFR Markets is reported to have entered long at 1.2070 with a stop at 1.1930, but ready to exit “ahead of schedule” in case another attempt to breach the 1.2130/50 area to the upside fails to materialize.

Inmediate support to the downside for AUD/NZD lies at yesterday's fresh 3.5-year lows 1.2003, followed by Sept 2009 lows at 1.1990, and Oct 2009 lows at 1.1932. To the upside, closest resistance shows at April 26 lows 1.2046, followed by April 25 lows at 1.2066, and Thursday's highs at 1.2104/10.

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