Back
3 May 2013
Forex Flash: Taking profit (for now) on short AUD/NZD – NAB Global Markets
FXstreet.com (Barcelona) - The AUD/NZD finished the day down 20 pips at 1.2060, which was the lowest daily close since October 2009. The pair is currently down another 20 pips during Asia trade at 1.2040. However, some analysts believe the pair is due for a bounce, and now is good time to cover short positions.
According to analysts at NAB Global Markets, “We issued a short AUD/NZD trade recommendation on March 25th at 1.2525, initially targeting 1.20 (see Global FX Strategist, 25th March 2013). We are now taking profit on the trade at 1.2058 but will look to re-enter a short position as early as next Tuesday following the RBA’s rates decision.”
Furthermore they added, “The cross has come a long way since March and technical indicators such as the daily RSI suggest the currency is marginally ‘overbought’. What’s more, speculative net long positions are much larger in NZD relative to AUD. This suggests the kiwi is relatively more vulnerable should any negative piece of global and/or New Zealand news trigger a flight back into ‘safe-haven’assets and at least temporary aversion to the NZD . Also, in relation to our short term AUD/NZD fair value model the cross has become slightly cheap (we have a ‘fair value’ range of approximately 1.2425 - 1.2125).”
According to analysts at NAB Global Markets, “We issued a short AUD/NZD trade recommendation on March 25th at 1.2525, initially targeting 1.20 (see Global FX Strategist, 25th March 2013). We are now taking profit on the trade at 1.2058 but will look to re-enter a short position as early as next Tuesday following the RBA’s rates decision.”
Furthermore they added, “The cross has come a long way since March and technical indicators such as the daily RSI suggest the currency is marginally ‘overbought’. What’s more, speculative net long positions are much larger in NZD relative to AUD. This suggests the kiwi is relatively more vulnerable should any negative piece of global and/or New Zealand news trigger a flight back into ‘safe-haven’assets and at least temporary aversion to the NZD . Also, in relation to our short term AUD/NZD fair value model the cross has become slightly cheap (we have a ‘fair value’ range of approximately 1.2425 - 1.2125).”