- During the early hours on Thursday, we initially saw the Aussie rallying against the Kiwi dollar, but we have since fallen a bit to test the 1.11 level.
- This is an area that is very important based on previous action, but we have broken above there before.
- The area between 1.11 and 1.12 has been consolidation a few times, just as the area between 1.10 and 1.11 has.
Keep in mind that the 50-day EMA underneath should offer quite a bit of support. As it is near the 1.1060 level and rising, I think that does offer a little bit of a small uptrend line, if you will. This market should continue to look to the upside overall, and I think this move doesn’t change this.
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I don't have any interest in trying to get too cute with this market. I recognize that the Aussie has been rallying against the New Zealand dollar in general, which does make sense considering that New Zealand just had yet another 50 basis point interest rate cut.
This Pair is Used for Triangulation as Well
This is a grinding pair and quite often I'll use it for triangulation. In other words, how to trade these two currencies against the US dollar. If one of them is stronger than the other one, then I choose that currency to trade against the US dollar, assuming that they're both going higher against the greenback. If they're both falling against the greenback, then I short the one that's weaker against the greenback. So it's a good useful tool to pay attention to the Australian dollar against the New Zealand dollar, but you can trade this pair. You just have to understand that it is very choppy and more of a grinder than anything else. The uptrend is still very much in fact.
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