currency crosses

Australian Dollar at Crossroads versus New Zealand Dollar

Friday, 02 January 2009 19:02:01 GMT  |  David Rodriguez, Quantitative Analyst

The Australian Dollar remains in a relatively tight range against the Swiss Franc, and our bias remains neutral on a hold of near-term price floors and ceilings. A makeshift downtrend channel signals that overall momentum remains to the downside, and a triple-top near 81.91 underlines stiff price resistance levels.

The Australian Dollar remains in a relatively tight range against the Swiss Franc, and our bias remains neutral on a hold of near-term price floors and ceilings. A makeshift downtrend channel signals that overall momentum remains to the downside, and a triple-top near 81.91 underlines stiff price resistance levels. Nearest support comes in at recent congestion levels near 72.00, while record-lows near 69.00 underline the last reasonable price floor visible on historical charts.    

The Australian Dollar remains within a fairly well-defined uptrend against its Canadian counterpart, and there is little reason to shift our bullish bias through near-term trade. Yet AUD/CAD bulls will have to watch for key resistance levels near the 88.20 mark. Said level represents the key 61.8 percent Fibonacci retracement of the 0.9850-0.7150 move and coincides with a noteworthy spike-high seen in September. A failure at said level would suggest that the broader downtrend remains intact.

The Australian dollar is reaching a fairly significant crossroads against its New Zealand counterpart, with the AUD/NZD approaching the end of a rising wedge consolidation pattern through near term trade. The 1.2250 mark represents the approximate top of the consolidation pattern, while 1.2000 is the approximate lower boundary of the wedge formation. A break in either direction will give us a clearer bias on the pair. The Australian dollar remains in a downward slide against the NZD since July, but a more recent October-January advance suggests that the pair could stage a more medium-term reversal.

 

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