Good afternoon guys,
We are placing this position now in anticipation of a negative result from the RBNZ at 12:00.
Fundamentally, there is potentially an interest rate divergence occurring between the RBA and RBNZ. The RBA has held firm and declined to take rates into the negative territory, whereas the RBNZ has opened to doors for negative rates in the future. With that in mind there is a potential opportunity on the AUDNZD depending on the interest rate statement from the RBNZ today.
AUDNZD – Daily Charts
The AUDNZD has moved back into a key structural zone at 1.0800. If the RBNZ adds fuel to the negative rates story the AUD may jump against the NZD and make its way towards the previous swing high resistance. On the other hand, if the RBNZ takes a more positive tone and suggests rates will remain on hold for a longer duration, the AUDNZD will be at risk of breaking through support towards the 1.0650 support level.
AUDNZD – 1 Hour Charts
We are aligning with the fundamentals as market consensus is negative rates will occur in NZ at some point in 2021.
Trade Setup: BUY Stop, entry price 1.0823, stop loss 1.0763 and take profit targets 1.0873-1.0920
Stop loss: 60 pips
Take profit: 50-97 pips
Be aware of a fake break above the bull flag formation.