Australian Dollar Cross Pick 04.10.2012
I’ve been sticking to the sidelines on the AUDNZD as the pair was oversold coming into April, and I am still waiting for a short-term correction for a good opportunity to sell the pair. Indeed, the aussie-kiwi looks poised for a rebound as the relative strength index climbs back above 30, but I will wait for a close above the 10-Day SMA (1.2620) to start looking for a potential entry. Ideally, I would like to see a move back towards former support (1.2800) to get short, but we may see the pair struggle to get back above the 23.6% Fibonacci retracement from the 2011 high to low around 1.2650-60 as the downward trending channel from March continues to take shape. As I expect to see the AUDNZD mark fresh lows for 2012, I will maintain my bias to sell rallies in the aussie-kiwi, and we may see the pair threaten the lows from the previous year as the fundamental outlook for Australia deteriorates.
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