AUDNZD: Preposterously Postponed Parity Party

The second half of the North American trading session had a lot more intrigue associated with it than the first half as there was actually some news that we were able to digest.  The Federal Reserve released their minutes from the March FOMC meeting which the market digested as “slightly less dovish” than it did when Chairwoman Janet Yellen first read her institution’s verdict.  At the release, the USD surged higher, stocks spiked lower, and commodities fell too, but much of that initial jump has been tamed as we fade in to the Asian trading session.

There isn’t really much to point out on the economic release front either when it comes to Asia, so there may not be much volatility to navigate.  One currency pair that may provide an opportunity to break down though is the AUD/NZD.  Last week, it had a lot of promise as it looked like it was going to make the run to parity, but it fell a preposterously miniscule 19 pips shy of the finish line as the Reserve Bank of Australia’s decision to leave monetary policy steady helped the pair rally back up to its declining trend line this week; though if you look at the chart from that article, 1.0020 was the hypothetical finish line.

All in all, this could be great news for those who missed the drop the first time around as the parity party may have just been postponed.  If the declining trend line can continue to put downward pressure on this pair, we may still get there; plus there is a 78.6% Fibonacci retracement of the most recent high to low that resides at the psychologically resistant 1.02 level with which to contend.  If all of these resistance levels exert their collective influence, parity and beyond may end up being reached after all.

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Source: www.forex.com