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22 May 2015
AUD/NZD: overbought and in need of consolidation – ANZ
FXStreet (Barcelona) - Sam Tuck, Senior FX Strategist at ANZ, shares the key view and technical perspective for AUD/NZD.
Key Quotes
“Parity never happened and the snap-back has been violent. Given the momentum of the snap-back a consolidation around current levels looks in order. There is scope for further AUD appreciation vs NZD, but further gains are likely to be more hard won.”
“Thus, exporters to Australia should note the extreme volatility of late and look at further AUD strength as an opportunity to move closer to a benchmark hedge ratio. Meanwhile importers can hopefully remain over-hedged from better levels and only use AUD weakness to top-up expiring hedges.”
“AUD has snapped back to fundamental fair value against the NZD. However, despite the severity of the recent move it remains extremely undervalued against NZD on a cyclical basis as cyclical factors have moved in the Australian dollar’s favour.”
“From a technical perspective the recent move has left AUD over-bought compared to NZD and in need of consolidation around current levels. The 200dma remains the key pivot for this cross.”
Key Quotes
“Parity never happened and the snap-back has been violent. Given the momentum of the snap-back a consolidation around current levels looks in order. There is scope for further AUD appreciation vs NZD, but further gains are likely to be more hard won.”
“Thus, exporters to Australia should note the extreme volatility of late and look at further AUD strength as an opportunity to move closer to a benchmark hedge ratio. Meanwhile importers can hopefully remain over-hedged from better levels and only use AUD weakness to top-up expiring hedges.”
“AUD has snapped back to fundamental fair value against the NZD. However, despite the severity of the recent move it remains extremely undervalued against NZD on a cyclical basis as cyclical factors have moved in the Australian dollar’s favour.”
“From a technical perspective the recent move has left AUD over-bought compared to NZD and in need of consolidation around current levels. The 200dma remains the key pivot for this cross.”