Australian Dollar Cross Pick 02.08.2012

I’ve been sitting on the sidelines with the AUD/NZD as the Reserve Bank of Australia interest rate decision sparked a rally to 1.2962, and we may see the exchange rate continue to consolidate over the remainder of the week as the bearish divergence in the relative strength index breaks down. Although I still favor playing the pair to the downside, it looks as though I will stay flat over the remainder of the week unless we see the pair make a run at the 50.0% Fibonacci retracement from the 2011 high to low around 1.3050, which should hold up as resistance.