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 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.