The Australian dollar rallied against the New Zealand dollar during trading on Thursday as we continue to see the Aussie favored.
Quite frankly that does make quite a bit of sense considering the central bank divergence between the 2 nations with the Reserve Bank of Australia recently raising rates while New Zealand looks like it may have to cut them.
We’ll just have to wait and see.
All things being equal though this is a market that I think is going to try to work its way toward the 1.2150 level. The 1.1950 level has offered support earlier in the week and it’s probably worth noting that the Australian dollar is considered to be maybe a little bit safer than the New Zealand dollar although that is a relative situation not necessarily 1 that means it is a safety currency in and of itself.
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Technical Support and Commodity Influence
The AUD/NZD trend is strong and the 50-day EMA is sitting near the 1.19 level so all things being equal I think there are plenty of reasons to think this continues to go to the upside. Furthermore, you also have hard materials such as gold recently doing very well and that favors the Australians not the New Zealanders who are more agriculturally based.
Ultimately, I like the idea of buying short-term pullbacks as long as we can stay above the 50-day EMA and I do think that eventually we break out and perhaps go looking to the 1.23 level although it’s worth noting that this pair does tend to be more of a slow grind than an impulsive one. Patience will be needed, but we should continue to see bullish price action.
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