AUD/NZD range breaker, headed to 1.1200 on break of 1.1020? - Nomura

As indicated above, AUD/NZD has reached our target and looks to be on the cusp of pushing through the top end of the 1.0238-1.1020 range it has occupied since mid-2016. 

Key Quotes:

"In our opinion, signs of divergence in the underlying momentum of the respective economies, recent adjustment in the ratio of commodity price baskets in favour of Australia and shift in market sentiment over the medium-term outlook for monetary policy in Australia – particularly given the positive improvements in the labour market – should keep AUD/NZD supported.

"Indeed, the ongoing adjustment in the Australia-New Zealand 2yr swap spread should continue to underpin AUD/NZD over the near term, in our opinion. A key test will be Australian Q2 GDP data (due 6 September) for which expectations will firm up over coming days as partial inputs continue to be released. We and consensus expect faster growth over Q2 relative to the 0.3% q-o-q in Q1.

Overall, we believe dips in AUD/NZD should remain fairly shallow and that a break of the range – which looks to be a matter of when, not if – could see the cross-rate accelerate quickly towards 1.1200 and then towards the July 2015 high (1.1430)."