Commodity currencies have been among the best performing Forex instruments of past few months, especially the New Zealand Dollar, which continues to get stronger seemingly every day. Not only
against the US Dollar, but in relation to its peers as well.
The AUD/NZD has been dropping since early March. It fell from 1.3789
to the recent low 1.2481, which is a large move for this pair. In fact,
that is more than the GBP/USD and the EUR/USD moved during this time,
making the Aussie/Kiwi cross worth following.
Recently, though, the AUD/NZD settled into a trading pattern, meaning
range-bound. For about two weeks now, the price has been locked between
1.2611 and 1.2481, a tight consolidation when compared to preceding
velocity. It is an unusually long stretch for the price to remain within
such narrow band.
This indicates that market players are clearly waiting for an
important catalyst to start a new move. An event, which could deliver a
jolt to AUD/NZD, is the RBNZ rate decision on Wednesday. Direction of
the price breakout is very likely to determine orientation of the next
major move. Breaching of either resistance or support can easily push
the price 300-400 pips within days.
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