After watching the AUD/NZD for some time, the pair finally broke out of its narrow range, and the pair should push lower in the coming days as the exchange rate carves out a near-term top around 1.3200. However, as the aussie-kiwi bounces back from the 200-Day SMA at 1.2968, it seems as though the pair will consolidate over the remainder of the week, and we may see the exchange rate test former support around 1.3050 for resistance. Although the relative strength index approaches oversold territory, I still like the downside for this pair, and will wait for a break and a close below the 200-Day SMA to short the pair. Should we have an opportunity to sell the pair later this week, I’ll set a soft target at the 38.2% Fibonacci retracement from 2011 high to low around 1.2870-1.2900, while placing the stop at 1.2968, the 200-Day SMA.
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