OctaFX | OctaFX Forex Broker
Open trading account

Forex Flash: AUD/NZD, reversal more likely than fresh weakness - TDS

FXstreet.com (Barcelona) - A reversal is more likely than fresh weakness in the AUD/NZD, says Alvin Pontoh, FX strategist at TDS, adding that "we expect a reversal of AUDNZD weakness, rather than expecting another downleg to fresh lows."

Alvin sees three fundamental reasons for this: "The swaps market has over-priced RBA rate cuts, the RBNZ seems just that little bit more concerned and is not in a position to lower the OCR and Wheeler’s comment suggests that the RBNZ’s rhetoric will likely stay ‘neutral’, rather than hawkish, for the time being, despite considerable worries about an overheating housing market."

"The risk to our view is that disappointing Aussie data over the coming weeks combined with the sustained high AUD pushes the RBA to cut rates again in June or July. Next week, at least, we expect activity data to be upbeat via a likely surge in home loans and a rebound in NAB business conditions" Mr. Pontoh added.

Forex: AUD/NZD holding above 1.2000 ahead of RBA

After wild moves all week long, AUD/NZD is last at 1.2008, falling from yesterday's Asia-Pacific session high at 1.2135, following widely unexpected big positive number in Australian jobs market for the month of April. The cross now has moved back lower to initial support around the 1.2000 round, on the back of massive Aussie weakness, once the pair has breached the mid to long term support base at the 1.0100 level, caused on USD strength across the board, and lead also on Yen weakness breaking the 100 Yen per USD level.
Read more Next
Start livechat