All the focus is down under…
The big focus in today’s Asian session was the AUD GDP releases which printed well above expectations. The AUD has been fairly well supported throughout the week so far and we assume that the GDP beat will continue to support the AUD.
We would say that the biggest risk to the AUD strength would be further escalation of trade war rhetoric which would prove negative for the AUD to the risk aversion.
Our pair selection for today:
Given the AUD strength we have chosen the AUDNZD as one of the pairs we will be watching closely today to look for trading opportunities. The reason we have paired the AUD with the NZD is mainly due to the yield spread for the two currencies which shows upside potential in the pair as well as central bank policy divergences.
AUDNZD – H4
AUDNZD – M30
As stated above, the biggest reason why we would like to pair the AUD versus the NZD would be due to the yield spread as well as the recent central bank divergences between the two currencies. In terms of intraday opportunity, we are long on this pair from the bounce at 1.0850. Further long opportunities can be considered if the pair has another pullback, alternatively a break of the recent resistance level and a pullback into that level could also give another chance to go long.
The biggest risk to the trade would be further escalation of trade war rhetoric so watch out for those ones in the news.
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Risk Disclaimer: Forex Trading carries a high level of risk. It is possible for traders to lose entire trading accounts if they do not know what they are doing. This post is not an enticement, signal or recommendation to buy or sell any financial instruments. All of the information in this post should only be considered as general market commentary and should never be used as trading or financial advice.
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