AUD/NZD sinks to the lowest level since April
- AUD/NZD moves in on a potentially strong level of support.
- Bears remain on control and analysts argue that the path of least resistance for the NZD remains higher.
AUD/NZD is currently trading at 1.0521 and is under pressure in early Asia, printing a low 1.0517 in a move telegraphed in yesterday's analysis:
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In doing so, AUD/NZD has dropped to the lowest level since April.
The drop, according to analysts at ANZ bank said it is difficult to justify fundamentally, but price action is bullet-proof.''
''We remain in the grip of the ebb and flow of global sentiment. 2021 is going to be pretty tough even with a vaccine (presuming it becomes available later in the year), with more layoffs likely in the US and Europe (some businesses won’t be able to hang on that long), which speaks to more policy action there''.
''With light now at the end of the tunnel, NZ’s better near-term prospects, and fading market expectations on negative rates, the path of least resistance for the NZD remains higher,'' the analysts argued.
AUD/NZD technical analysis
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At this juncture, the pair is testing a potentially strong demand area and level of support.
A 38.2% Fibonacci retracement level will meet a prior support level which guards the correction highs and late October highs.
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
