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Market Analysis

AUDNZD: forex trading is going down under

November 19, 2018
BY Emma Richards

Australia and New Zealand are two nations known for their stability, but this week the forex currency pair became the focus of traders looking to profit from expected volatility and price correction. During the last 8 days, the New Zealand dollar has gone on an absolute bull run against the Australian dollar, and now many traders are seeing AUDNZD as a highly attractive pair for trading. Exness traders around the world are at the ready for what could be an underestimated move that may well produce incredible profit opportunities in the coming days and weeks.


Be ready for the AUDNZD breakout



Solid as ever, the Australian dollar has been this week’s sleeping giant, however, New Zealand’s rally has perhaps been influenced by something well worth taking to market. 


What big business is saying about the Australian dollar New Zealand dollar

Since that announcement, the volatility has been clear, so it may well be worth keeping an eye on the New Zealand dollar as it races against its larger antipodean counterpart, and a keen eye in liquid spot markets such as FX trading makes the difference between missing and taking opportunities.

According to Goldman Sachs and Nomura—two of the world’s largest tier 1 interbank FX trading dealers—rates and the New Zealand dollar will rise sooner than most local forecasts indicate.

US investment bank Goldman Sachs says “the strength in New Zealand’s hard data means the chance of a 2019 rate hike is increasing.” Nomura’s strategist Andrew Ticehurst, based in Sydney, is picking the Kiwi dollar, which rose sharply after strong employment data. Mr Ticehurst’s view is that it will rise further in the coming months.


AUDNZD: Conflict of analysis

The Reserve Bank said it expects the official cash rate to stay on hold at 1.75 per cent right through next year and into 2020. The rate has already been on hold for two years, hence looking at this volatility mentioned by two large banks which runs counter to local analysis. This conflict in analysis means there could be an opportunity to catch this market whilst many get stuck digesting the mainstream news.

trading Australian New Zealand dollar

Interests rates movements often precede the value of a currency and AUD has room to grow.

Local economists say the lack of inflation has taken pressure off the bank to lift rates in a hurry, despite continued strength in the economy. With mainstream eyes on that, the keen trader could do well to observe the strategic perspective from within the FX dealers themselves.

Business confidence collapsed in the wake of last year’s election result, it’s now very clear that the economy did not, so this week’s surprisingly strong employment data follows better-than-expected GDP growth in the second quarter. The signs that all traders were waiting for are presenting, and those ready to trade may well see a sharp and significant upward move from down under.


Have your MT4 trading platform at the ready


This article is a marketing communication and does not constitute investment advice or research. Its content represents the general views of our experts and does not consider individual readers’ personal circumstances, investment experience, or current financial situation. This article is not prepared in accordance with legal requirements promoting independent investment research, and Exness is not subject to any prohibition on dealing before the release of the article. Readers should consider the possibility that they may incur losses. Therefore, Exness is not liable for any losses incurred due to the use of its articles.
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