AUD/NZD bulls expecting an opportunity on dimming kiwi sentiment


  • AUD/NZD is currently trading at 1.0517 and remains virtually unchanged within a phase of expansion as bulls and bears fight to break out one way or the other. 
  • The range today, so far, has been between 1.0492 and 1.0517 as markets look to Aussie risk events for the next catalyst. 

With the Thanksgiving holidays in the rearview mirror, attention is now focussed on month-end and the inevitable rebalancing flows that it brings. 

However, for the cross, markets are going to start wondering how much of an advantage the kiwi can maintain over the Aussie.  

Risk appetite has remained strong while investors continue to look through the rising covid cases and towards a light at the end of the tunnel. 

Commodity markets remain well bid, but both the Aussie and kiwi have been benefitting, although the kiwi really took off in November, scoring a new high on Friday, riding the Reserve Bank of New Zealand sentiment.

Meanwhile, metals, in particular, had a big week and copper added an additional 1.39% Friday at $7,505, up 3% on the week and iron ore marked a 6-year high above $130 as Chinese port inventory dropped for another week to hit the lowest since late October, bonding well for the Aussie, especially considering the disputes over other commodities, such as coal. 

Bank to the RBNZ, there will be a focus on how much has already been priced into the kiwi now.

Last week, the kiwi benefitted further on the back of a letter by NZ Grant Robertson to the RBNZ.

Robertson asked the central bank to consider surging house prices in monetary policy decisions, toning down the expectations of RBNZ rate cuts.

The positioning data, which is currently stretched vs the greenback, will be a useful tool in establishing the mood of the market behind the bird going forward and how to apply it to the cross, AUD/NZD.

''Range trading after volatility last week. We think the NZD eventually softens against the AUD, but can’t see a near-term catalyst,'' analysts at ANZ bank explained. 

There is nothing to note on the calendar for the kiwi this week, and instead, attentions will with a busy week full of Aussie events, starting with the Reserve Bank of Australia and then Gross Domestic Product.

 Governor Philip Lowe will deliver a speech to the Parliament Economic Committee the following day. 

''We doubt there will be any surprises to digest in the RBA statement. The Bank will confirm it stands ready to provide additional easing if required. More interest in Lowe's parliamentary testimony,'' analysts at TD Securities explained.

''For Gross Domestic Product, see upside risks to the RBA's 1.75% QoQ average increase in both Q3 & Q4 to meet the Bank's Dec'20 GDP forecast. Consumption, Dwelling Inv, Govt, Inventories to add to GDP.''

For the day ahead, we have the November manufacturing PMI and non-manufacturing PMI which analysts at Westpac said will be supported by the resurgence of domestic and external demand.

AUD/NZD

Overview
Today last price 1.0517
Today Daily Change 0.0008
Today Daily Change % 0.08
Today daily open 1.0509
 
Trends
Daily SMA20 1.0601
Daily SMA50 1.0692
Daily SMA100 1.0764
Daily SMA200 1.0654
 
Levels
Previous Daily High 1.052
Previous Daily Low 1.0493
Previous Weekly High 1.0563
Previous Weekly Low 1.0472
Previous Monthly High 1.0906
Previous Monthly Low 1.0595
Daily Fibonacci 38.2% 1.051
Daily Fibonacci 61.8% 1.0503
Daily Pivot Point S1 1.0494
Daily Pivot Point S2 1.048
Daily Pivot Point S3 1.0467
Daily Pivot Point R1 1.0522
Daily Pivot Point R2 1.0534
Daily Pivot Point R3 1.0549

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

GBP/USD retreats from new highs amid dollar strength

GBP/USD has fallen off the peak of 1.3719, the highest since 2018, amid fresh dollar strength. Optimism about the UK's vaccine campaign and lower cases boosted sterling earlier. The greenback awaiting Biden's first moves as President. 

GBP/USD News

EUR/USD falls toward 1.21 ahead of Biden´s inauguration

EUR/USD has been descending toward 1.21. President-elect Biden is inaugurated later in the day and hopes of stimulus are high after Treasury Secretary nominee Yellen's testimony. 

EUR/USD News

Gold: Bulls recapture 200-DMA ahead of Biden's inauguration

Gold prices are attempting to correct higher above 200-DMA. The metal cheers rising US inflation expectations amid hopes of a massive stimulus package under the incoming Biden administration. 

Gold news

Bank of Canada Rate Decision Preview: No change anticipated in interest rate

The Bank of Canada is widely expected to keep monetary policy and quantitative easing unchanged at its meeting on Wednesday in spite of new COVID-19 provincial lockdowns and a slowing economy.

Read more

US Dollar Index: Upside target remains at 91.00

DXY met buyers in the 90.30 region earlier on Wednesday and now resumes the upside to the 90.50/55 band.

US Dollar Index News

Forex MAJORS

Cryptocurrencies

Signatures