FxWirePro: AUD/NZD bulls in intermediated trend rebuild positive momentum, major trend drives in non-directional, upswings implied by interest rate

The bulls break resistances of 1.0493, likely to make equidistance upmove (2.39%) upon breach above support of 1.0588.

The current prices spike above DMAs, capture dips to add longs.

RSI’s upward convergence signals strength in prevailing rallies that could offer bullish targets of 1.0750 levels.

Stochastic evidences %K crossover that indicates the intensified buying momentum.

Bulls’ attempts of breach above resistances of 1.0514 levels but struggling to sustain above, the upswings rejecting at 21EMA as the major trend puzzling with non-directional swings.

For now, rallies began to rebuild positive momentum, targeting above 1.0600 today.

Well, in the medium term, the pair likely to head towards 1.0750 or above in 1-3 months’ timeframe. The cross remains well below fair value estimates implied by interest rates, commodity prices, and risk sentiment. 

AU swap yields 1-3 month: The 3y has probably based at 1.60%, the RBA expected to sit tight at a 1.5% cash rate for some time.

While RBNZ’S ANY further easing bias slightly hard to justify. The RBNZ ended its easing cycle on 10 Nov and will now remain on hold for a long time. That will anchor the short end somewhat (although the 2yr-OCR spread – one measure of stretchedness – has been even higher than the current 50bp during past on-hold periods), with the long end free to follow offshore yields.

Hence, we reckon that the bullish momentum of this APAC pair seems to be intensified, AUD was one of the best performers overnight, AUDNZD rose about 100 pips (traveled from 1.05 to 1.0600 mark) in just 3-4 days.

The FxWirePro currency strength index for AUD strengthened above 125 which is an extremely bullish signal, while NZD appears to be quite bearish. Intraday speculators could get benefitted by these flashes as this tool measures the hourly performance of domestic currency with the basket of other 7 currency peers.

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