The AUD/NZD pair fell during the course of the day on Monday, breaking below the 1.02 level. With that being the case, the market looks as if it wants to head down to the parity level. With this, I believe that you can sell rallies as they continue to appear on short-term charts. Remember, this pair tends to be somewhat choppy, mainly because the two currencies are sell interconnected, and the economies as well. With this, it’s a lot like the EUR/GBP pair, you don’t see many major moves.
That being said, I believe that the move below the 1.03 handle is significant, and that it should continue to see bearishness in this marketplace. I think that it’s only a matter of time before we break down to the parity level, and quite frankly that is what I have been aiming for. Have no interest in buying this pair, and I believe that the 1.03 level will serve as a significant barrier above.
[CAD:FXAcademy CTA #73]Sell rallies, watch the AUD/USD pair
I continue to sell rallies in this pair, but I am also watching the AUD/USD pair. After all, it gives us a barometer on what the Australian dollar is like in general as it is without a doubt the most liquid trading pair that includes the Aussie. With this, I think that further weakness is ready to be had, but a short-term rally might happen. I look at that as opportunity because the New Zealand dollar is much stronger than the Aussie, relatively speaking of course.
Sooner or later, we will reach the parity level. When we do, expect a big bounce, because quite frankly it is about as large of a number as you can have. Ultimately, the market looks as if it is going to continue to favor the bearish traders out there, and as a result I want to stay on that side of the fence. It is not until we break above the 1.05 level that I would consider buying this pair, and quite frankly I don’t see that happening anytime soon.
