- The Aussie’s recent bullish play against the NZD is beginning to run into resistance.
- Thursday’s Trade Balance for the NZD could swing market favor back into the Kiwi’s court.
The AUD/NZD is caught near the 1.0750 level after last week’s recovery from lows near 1.0650 failed to continue beyond a familiar level at 1.0775.
The Aussie has been declining against the Kiwi since late May, falling from a peak of 1.0961 as the AUD suffers from being considered one of the weakest G10 currencies, losing ground against its closest counterpart the NZD for almost a month straight before pumping the brakes at last week’s bottom.
Last week’s gain for the AUD could prove to be limited if the Kiwi manages to swing back into the bullish zone, and late Tuesday will be bringing such a chance for the NZD, with New Zealand Trade Balance figures posting late in the day, at 22:45 GMT. The headline m/m trade balance is expected to come in at a relatively sedate 100 million versus the previous reading of 263 million, while the y/y/ figure is expected to remain relatively unchanged, with the forecast sitting at -3.74 billion compared to the previous period’s -3.76 billion.
AUD/NZD levels to watch
Daily candles have the pair trying to rough in a higher low from 1.0650, but bullish action will remain capped for now by the last high at 1.0960. A bearish continuation will see the pair falling into April’s lows just below 1.0500, while a successful bullish reversal will have to mount January’s highs at 1.1070 before the Aussie can declare 2018 a win.
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