The AUD/NZD pair fell rather hard during the course of the session on Monday, as the markets continue to chop. With this, the market looks as if it will continue to consolidate overall, with perhaps a little bit of a short-term downward bias. The Australian dollar is soft, and so is the Kiwi dollar quite frankly. With this, I don’t have any interest in putting money into either particular currency against the US dollar. However, against each other it’s a little bit of a different type of situation. After all, it looks as if the market will continue to consolidate overall, and as a result I think it’s only a matter time before we find support, probably closer to the 1.10 handle.
With that being said, I am a seller in general, especially if we can break down below the bottom of the range for the session on Monday, or more specifically the 1.12 handle. If we can get below there, the market should continue to grind down towards the 1.10 handle which of course has attracted quite a bit of attention recently.
Continuing to play the range
I am continue to play the range in general, and as a result I think short-term selling is a possibility but I also recognize that the 1.10 level should be rather difficult to deal with for the sellers. I think we will continue to go back and forth, especially considering that the 2 currencies are so soft in general against what is typically considered to be the benchmark in the Forex market, the US dollar. The Australian dollar of course has a lot of problems with the gold markets looking soft and the Asian markets starting to sell off in general.
On the other side of the coin, the New Zealand dollar struggles as well, because of the same problems in Asia. Ultimately, I think that the US dollar will continue to strengthen against both of these currencies, making the movements in this pair somewhat sedate. But as long as we have a nice range, I have no qualms whatsoever of playing back and forth.