While most currencies are stuck in the same range in the past two weeks, the AUD/USD and NZD/USD are out of these ranges – to the downside. The sun currently doesn’t shine on the high yielding currencies of the south pacific.
AUD/USD out of range – click to enlarge.
Yesterday I described how the EUR/USD is trading in a very nice and even predictable range. While this range could be very convenient in the short run, it could indicate a long term change in the dollar’s direction in the long run.
EUR/USD is trading in the lower part of the range (1.48-1.505), at 1.4880, but is definitely inside it. But today, not all the currencies stick to their ranges. The Geek Who Knows just posted a fresh technical analysis of EUR/USD.
Australian dollar down under
The Australian dollar, which enjoys a high interest rate of 3.5%, was trading at range of 0.92-0.94 since November 6th. It touched 0.94 at the beginning of this week, making it a year-to-date high. But then came Bernanke.
Since Bernanke’s speech on Monday, the Aussie is going down.Today, during the European morning, AUD/USD went as low as 0.9150, clearly out of the range. It’s currently unclear if this is a significant break downwards or just a temporary glitch. Currently AUD/USD is somewhat higher, at 0.9185.
Kiwi flies low
Also Australia’s neighbor at the other side of the ditch, New Zealand, enjoys a high interest rate of 2.5%. This helped the New Zealand dollar make nice rise this year as well. Also in the land of the kiwi, the local currency is traded in a range against the dollar.
NZD/USD traded between 0.73 to 0.75 in the past two weeks. And, like the Aussie, it went as low as 0.7280, below the range. Here, the move is less significant. The margin is only 20 pips, and also the return was quick. NZD/USD is now at 0.73 once again, flirting with the range.
Is this dip of the Aussie and the kiwi temporary, or is it an early-bird warning for the rest of the currencies? Was the greenback comeback at the end of October just a retrace, or it did it mark a bigger change in the dollar’s direction?
Did anybody say strong dollar?