AUD/NZD: Range defining the key bias into end year - Westpac

According to Tim Riddell, Research Analyst at Westpac, momentum is low for AUD/NZD cross and could turn (in favour of AUD) but, until a turn is confirmed, further retracements of the rally from 1.0360 are likely in early-4Q.

Key Quotes

“An initial slide to test 1.0750 (50%) should be seen as the first leg of a more complex and potentially frustrating correction with resistance in the 1.10 area.”

“Weekly

• The sharp turn developing in weekly momentum could lead to deeper than standard retracements of the 1.0360-1.1145 rally
• Deep retracements could undermine the potential for a more dynamic series of moves (towards 1.14-1.15) but bias is for an interim period of range trading”

“Monthly

• The continuation of overlapping price action since 2H 2015 may be frustrating, but is still seen as a forming long term base
• Although monthly momentum is pushing higher, it lacks dynamism. Moves since appear corrective, suggesting a broad consolidation rather than a reversal”