AUDNZD FAILS TO HOLD CRITICAL LEVEL AFTER NEW ZEALAND TRADE DATA
Earlier in Asian session, New Zealand’s imports, exports and trade balance data was published by the Statistics New Zealand. The report suggested that total goods exports rose in February 2014. This boosted New Zealand dollar against most of the counterparts, including the Australian dollar, as AUDNZD moved lower after the release.
The trade balance registered highest-ever trade surplus ($818 million) for any February month, and the value of exported goods rose $663 million with goods exported to China rising to $388 million. The labour statistics manager Louise Holmes-Oliver mentioned in the report that “the rise in dairy this month was supported by logs and meat, with much of the increase in these commodities destined for China”. The outcome exceeded the expectation by a fair margin, which is helping the New Zealand dollar to gain strength Intraday.
AUDNZD is set to register a major failure at around 50.0% Fibonacci retracement level of the last major bear leg from the 1.0940 top to 1.0530 low. This level also coincides with a major trend line, which has acted as a resistance numerous times. However, the pair is approaching a critical channel support zone where buyers are expected to return. If the pair pushes one more time higher and succeeds in piercing the bearish trend line, then a move towards the 61.8% Fib retracement level is possible in the short term.
Any further downside acceleration, and break of the channel support region could open the doors for a move back towards 1.0600 support zone. There is a minor divergence noted on the RSI between the last two highs (1.0760 and 1.0740), which paints a mixed scenario on 4 hour timeframe. Considering that NZDUSD is reaching critical resistance levels and AUDUSD has more room on the upside, one can anticipate swing moves in AUDNZD in the sessions ahead.
Prepared by Aayush Jindal, Chief Technical Strategist at Capital Trust Markets
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