AUD/NZD: sell the rallies
AUD/NZD fell by 40 pips below 1.1400. New Zealand reported surprisingly good data today (retail sales gained 1.7% vs. 1.4% expected, while core retail sales increased by 2.3% vs. 1.3% expected). As for Australia, wage growth stayed at the slowest pace in more than 3 years.
Westpac recommends selling AUD/NZD on bounces due to the difference in the nations’ monetary policy: “The Reserve Bank of New Zealand is going to start tightening in March; the Reserve Bank of Australia is cutting rates.”
TD Securities points out that price signals are constructive on the weekly chart (two “hammer” like candle signals that point to a reversal which may be in process), but the broader trend remains lower and quite powerfully so, according to a range of trend momentum studies.
Chart. H4 AUD/USD