ForexPros Daily Analysis July 26, 2011
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AUD/NZD Waiting For a Catalyst
Commodity currencies have been among the best performing Forex instruments of past few months, especially the New Zealand Dollar, which continues to get stronger seemingly every day. Not only against the US Dollar, but in relation to its peers as well.
The AUD/NZD has been dropping since early March. It fell from 1.3789 to the recent low 1.2481, which is a large move for this pair. In fact, that is more than the GBP/USD and the EUR/USD moved during this time, making the Aussie/Kiwi cross worth following.
Recently, though, the AUD/NZD settled into a trading pattern, meaning range-bound. For about two weeks now, the price has been locked between 1.2611 and 1.2481, a tight consolidation when compared to preceding velocity. It is an unusually long stretch for the price to remain within such narrow band.
This indicates that market players are clearly waiting for an important catalyst to start a new move. An event, which could deliver a jolt to AUD/NZD, is the RBNZ rate decision on Wednesday. Direction of the price breakout is very likely to determine orientation of the next major move. Breaching of either resistance or support can easily push the price 300-400 pips within days.
Forex Trading Analysis written by Mike Kulej for ForexPros. For more information about technical analysis visit ForexPros.
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