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Thoughts on the NZD/AUD pair

Written by Sam Coxhead on June 30th, 2011.      0 comments

12:00PM (NZT) The markets have continued to be volatile this week as the European debt situation plays out.
On the balance both the AUD and NZD have been in demand. The NZD has outperformed by a small margin at this stage, and the flows are being driven by end of financial year flows.
The NZD/AUD  has been moving around in its recently established .7550-.7800 wider range and is currently at .7750 at the interbank level.  Expect to see resistance again up towards .7800 should we see those levels by the end of the week.
Support levels on the downside are towards the .7650 initially now.
Next week looks to be an interesting one as we finally will get to focus more domestic Australian and New Zealand economic data. In Australia we have Building Approvals, Retail Sales, Trade Balance, Unemployment and the RBA cash rate announcement( will be unchanged at 4.75%). In New Zealand there is the all important GDP number.
So there is room for further volatility in the coming week, if any pending need to make a transfer, placing an order within the recent range should be considered.
Whilst current levels are not those that we saw earlier in the year, current levels still represent good value buying of NZD with AUD from a historical perspective.