Analysts at Nordea prefer NZD to AUD as the Aussie has thrived due to a relative positive mood around China vs. RoW growth. AUD/NZD is trading at 1.0597.
“AUD has traded like a rocket in recent weeks despite starring directly into a housing market abyss again. Current auction clearance data suggest that Australian house prices will drop (at least) 1.5% a month in the coming period. Ouch.”
“Technically, a short position in AUD/NZD looks compelling as the bearish channel since late-2017 remains intact.”
“We opt to go short AUD/NZD with a target of 1.02 (and a S/L at 1.0820) on the cocktail of higher USD/CNY, weak domestic Australian fundamentals and wobbly risk appetite ahead.”