SEB: bearish on AUD/NZD
AUD/NZD opened the week at 1.1497 with a big gap up after closing at 1.1358 on Friday. The gap formed because New Zealand’s dollar was hit by the negative news about Fonterra, the nation’s biggest dairy exporter. However, the bears immediately started selling Australian dollar at those higher levels: the pair turned down and is declining for the third day in a row. The bears have filled the gap today.
Analysts at SEB are bearish on the pair and expect it to slide to 1.1000/0800, ideally 1.0871 (161.8% of wave 1). Note that Aussie no longer has an interest rate advantage over kiwi as the Reserve Bank of Australia cut its benchmark rate to 2.5% yesterday, to the same level with the RBNZ rate.
Chart. Daily AUD/NZD