Part 2/2:
Technicals: So far we have a clean break below the bearish wedge pattern on the daily chart, although buyers are becoming more active recently and push the price higher. The 1-hour chart shows the key sell zone that should be monitored - it's the pullback level to the lower wedge resistance that aligns with a short-term horizontal resistance.
Economic surprises: If you followed our posts, you know that the Australian dollar had some of the strongest ratings in our Economic surprises index. The NZD is now picking up, but the market narrative about negative interest rates could still be bearish for the currency.
US-China tensions, and possible China-Australia trade tensions, could significantly weigh on the Australian dollar.
Positioning: We'll make an update on market positioning after the CFTC reports this week's CoT numbers.
Correlations: Correlations are described in the previous post. I like the divergence between the pair and the ASX200 vs NZX50. This could be bearish for the pair. We need to post correlations separately, or our charts would be too cluttered.
Risk sentiment: Deteriorating. Stock indices falling on renewed trade tensions. Bearish.
Technicals: So far we have a clean break below the bearish wedge pattern on the daily chart, although buyers are becoming more active recently and push the price higher. The 1-hour chart shows the key sell zone that should be monitored - it's the pullback level to the lower wedge resistance that aligns with a short-term horizontal resistance.
Economic surprises: If you followed our posts, you know that the Australian dollar had some of the strongest ratings in our Economic surprises index. The NZD is now picking up, but the market narrative about negative interest rates could still be bearish for the currency.
US-China tensions, and possible China-Australia trade tensions, could significantly weigh on the Australian dollar.
Positioning: We'll make an update on market positioning after the CFTC reports this week's CoT numbers.
Correlations: Correlations are described in the previous post. I like the divergence between the pair and the ASX200 vs NZX50. This could be bearish for the pair. We need to post correlations separately, or our charts would be too cluttered.
Risk sentiment: Deteriorating. Stock indices falling on renewed trade tensions. Bearish.
