- AUD/NZD up 0.35% on the day, bias higher, on track to test trendline at 1.0830.
- The pair has resumed upside after consolidation on the previous two sessions.
- Downside finds strong support at 100-DMA at 1.0661 and Ichi cloud top at 1.06553. We see weakness only on break below.
- Focus now on RBNZ this week, with equal chances that the next move in the OCR could be up or down.
- Analysts foresee a dovish guidance on the cards. RBNZ is expected to leave the OCR at 1.75%.
- RBNZ’s survey of inflation expectations (later today) will also be watched, a surprise in either direction could well influence the RBNZ’s MPS later in the week.
- Technical indicators on weekly charts are bullish, RSI strong above 50, Stochs are biased higher and MACD is on verge of bullish crossover.
- We see scope for test of trendline resistance at 1.0830, bullish invalidation seen on decisive break below 200-DMA at 1.0612.
Support levels - 1.07 (5-DMA), 1.0668 (20-DMA), 0.1661 (100-DMA), 1.0618 (38.2% Fibo 1.10188 to 1.03706 fall)
Resistance levels - 1.0771 (61.8% Fib retrace of 1.1018 to 1.0370 fall), 1.08, 1.0830 (trendline)
Call update: We had given a long call on the pair (http://www.econotimes.com/FxWirePro-AUD-NZD-breaks-100-DMA-at-10671-eyes-trendline-at-10830-stay-long-833838).
Recommendation: Hold for targets.
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