I like short positions on AUD/NZD at current levels (currently trading at 1.1330) from a technical standpoint. The cross is in a strong downtrend and downtrend resistance drawn from the March 14 high is now seen at 1.1407. The daily MACD is below zero, so the recent rally should be confined within this bearish trend. I would place a stop at 1.1440, just above the downtrend resistance and 38.2% retracement of the 1.1600 to 1.1213 sell-off. I will set a target of 1.1005. Fundamentally I continue to prefer long NZD positions, especially after yesterday’s stronger-than-forecasted CPI print.
Stay long AUD/CHF for a move to 0.8864 (spot now 0.8732). The pair has broken the longer-term downtrend, while taking out supply around the 87 handle.
One of my preferred shorts, which I have been talking about in the afternoon wrap. The pair closed below strong bids between 1.4193 to 1.1466. Momentum indicators suggest lower prices and rallies should be sold, for a move to the 38.2% retracement of the April to September rally at 1.3958.
Less conviction to hold shorts than EUR/AUD given the falling wedge pattern. However momentum indicators signal lower levels, while the pair has also closed below key horizontal support. Look to sell rallies, given the pair is two standard deviations from both its 20-and 50-day moving average.