Australian and Kiwi dollar in battle of the antipodes

See the latest Australian dollar analysis here:

SocGen: Australian dollar rises “favoured long-term view”

Not much happening in currency land today as risk markets (aka the bots) remain closely tied to the outcome of the Georgia special elections in the US that will decide the fate of the Senate, and hence President-elect Biden’s legislative agenda. In crypto world, Bitcoin is hovering just above the $34000USD level having gotten ahead of itself – again – after its recent gap higher. Note how the trendline from the post Xmas “low” shows potential buy-in points for the dip sniffers:

The key question is the struggle between the Aussie and Kiwi dollars. The former has been in a relatively wide uptrend channel since Christmas, and is seemingly on its way to the middle-of-the-road economist forecast of 80 cents sometime this calendar year:

Its been a big leap, now well over 40% from the lows suffered as the COVID pandemic spread, with the 2017 highs now almost in sight:

The fly in the ointment might be the Kiwi as the AUDNZD cross shows an inability of the Aussie to gain real strength against its nominally weaker cousin throughout the latter half of 2020:

Indeed the Kiwi is outperforming against USD, having surpassed the pre-COVID levels (solid black horizontal line) and catching up to Aussie:

However, there’s another cross to keep an eye on, literally on the opposite side of the world. Pound Sterling is really suffering as the UK goes into yet another lockdown as Boris Johnson fumbles the pandemic yet again.

The weekly chart of the Pound/Aussie cross (GBP/AUD) shows the potential to break a long held support line at the 1.75 handle as the UK’s service sector contracts considerably in the months ahead, while commodity prices remain extremely well supported. Opportunities still abound here…

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Comments

  1. AU and GU. Some of the most volatile currency pairs in currency markets.

    The worlds gone to hell in a handbasket. Its all about managing risk these days.