AUD/NZD: 5 major reasons for a sell + Technicals
TECHNICALS:
AUD/NZD is trading at a major daily resistance level and started to form a bearish wedge pattern on the H1 chart, where a fresh lower high is already evident.
The bearish wedge formation signals weakness in the recent uptrend, with projections above previous peaks failing to move significantly to the upside.
A break below the bearish wedge provides a selling opportunity in this case.
POSITIONING:
Latest CoT report shows that both the AUD and NZD positioning is mixed, with some market participants increasing and some decreasing their bullish bets.
CORRELATIONS:
Australian and New Zealand stock market ratio is bearish for the pair. There is a huge gap to close here, which can be seen on the chart.
INTEREST RATES:
Also on the correlations chart above is the interest rate differential between 2y AU and NZ yields. Again bearish for the pair.
UPCOMING ECONOMIC REPORTS:
Wednesday - RBNZ monetary policy meeting. Given the recent strong labour market numbers coming from New Zealand, and their handling of the pandemic (no new cases), the meeting could be more hawkish (or less dovish, if you like) than expected and support the NZD.
== SUMMARY ==
My traders and I will look for selling opportunities in this pair.
Please hit the "LIKE" button if you find this post useful. Also, don't forget to follow to get more trade ideas like this. Thanks!
AUD/NZD is trading at a major daily resistance level and started to form a bearish wedge pattern on the H1 chart, where a fresh lower high is already evident.
The bearish wedge formation signals weakness in the recent uptrend, with projections above previous peaks failing to move significantly to the upside.
A break below the bearish wedge provides a selling opportunity in this case.
POSITIONING:
Latest CoT report shows that both the AUD and NZD positioning is mixed, with some market participants increasing and some decreasing their bullish bets.
CORRELATIONS:
Australian and New Zealand stock market ratio is bearish for the pair. There is a huge gap to close here, which can be seen on the chart.
INTEREST RATES:
Also on the correlations chart above is the interest rate differential between 2y AU and NZ yields. Again bearish for the pair.
UPCOMING ECONOMIC REPORTS:
Wednesday - RBNZ monetary policy meeting. Given the recent strong labour market numbers coming from New Zealand, and their handling of the pandemic (no new cases), the meeting could be more hawkish (or less dovish, if you like) than expected and support the NZD.
== SUMMARY ==
My traders and I will look for selling opportunities in this pair.
Please hit the "LIKE" button if you find this post useful. Also, don't forget to follow to get more trade ideas like this. Thanks!
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