AUD/NZD Bears Remain in Control, Tgt YTD Low 1.0539
AUD/NZD bears remain in control, despite the GTD price
index shocker and the RBA rate cut, that was only 40% priced in
continues to drive the cross off a cliff.
AUD/NZD was at 1.1250
just last week and we have made recent lows of 1.0789 already on a
decisive downside play with relentless momentum. Quite a majority of
the market was caught out on the RBA's cut, and that could mean more
downside to come yet, even 20 hrs post the event.
"We had not
been persuaded that last week's soft Q1 CPI was sufficient to put the
RBA over the edge, explained analyst sat Brown Brothers Harriman,
"However, in explaining the decision, Governor Stevens recognized that
while inflation had been low for some time, it was exceptionally low now
(CPI actually fell in Q1), and the outlook had diminished. He also
noted "very subdued" growth in labor costs."
However, we will
have to wait until for nonfarm payrolls to get a real consensus on the
path of AUD/USD now and subsequently, the cross could enter a phase of
consolidation in due course.
AUD/NZD levels
AUD/NZD
took out the 1.08 handle with a pick-up of momentum and now targets
29th Feb lows of 1.0758 before 1.0670 and 25th Feb lows. 1.0539 is the
YTD low scored in Jan after the Chinese sell-off and stands as key
target. On a correction, the paid will only find the bearish tone
alleviated above the psychological 1.10 handle.
