11 Oct 2013
AUD/NZD head and shoulders bearish?
FXstreet.com (London) - AUD/NZD is trading on a sideways channel consolidated after the downside took fold attracting demand protecting previous days highs and resistance levels.
Research teams at TD Securities said, “The AUD traded heavily in the wake of a soft Australian employment report, but has since recovered most loses in line with the overarching consolidative tone to the FX space…the wave of optimism on the currency since early September also continues to threaten the sizeable speculative short position, although the short term direction for AUD/USD should be more focused on US developments in the near term”. Over in New Zealand, Manufacturing PMI fell to 54.3. “Delving into the components, production, employment, new orders, finished stocks and deliveries fell across the board, perhaps responding to the on going elevated NZD”, explained research teams at TD Securities.
AUD a fade?
It seems at this stage that the market is pricing very little in terms of tail risk from the US situation and as the situation drags on, the market might become more concerned with risk likely to suffer. On this basis and given the technical setup, AUD might look like an attractive fade pressuring the cross to the downside yet. Daily head and shoulders in the cross signals more downside to follow.
Research teams at TD Securities said, “The AUD traded heavily in the wake of a soft Australian employment report, but has since recovered most loses in line with the overarching consolidative tone to the FX space…the wave of optimism on the currency since early September also continues to threaten the sizeable speculative short position, although the short term direction for AUD/USD should be more focused on US developments in the near term”. Over in New Zealand, Manufacturing PMI fell to 54.3. “Delving into the components, production, employment, new orders, finished stocks and deliveries fell across the board, perhaps responding to the on going elevated NZD”, explained research teams at TD Securities.
AUD a fade?
It seems at this stage that the market is pricing very little in terms of tail risk from the US situation and as the situation drags on, the market might become more concerned with risk likely to suffer. On this basis and given the technical setup, AUD might look like an attractive fade pressuring the cross to the downside yet. Daily head and shoulders in the cross signals more downside to follow.