Australian Dollar Cross Pick 01.26.2012

After booking profits on the short AUD/NZD trade from earlier this week, I’m waiting for another good entry to sell the pair. As the aussie-kiwi maintains the narrow range from earlier this month, the pair certainly presents a well defined range-trade, but I prefer to fade any advances in the exchange rate as the bearish divergence in the relative strength index continues to pan out. In turn, I am looking to get short around 1.3000, and we may have an opportunity to build up a short position on the AUD/NZD as it remains poised for a bearish breakout.