Positive signs for Aussie & Kiwi
Both antipodeans showed encouraging signs overnight, with AUDUSD currently up to 0.7210 and NZDUSD rallying rather more impressively to 0.6830. This is a good start to the year for both, and although we are generally positive there is resistance indicated a little further north. For the New Zealand Dollar this comes in at the psychologically important 0.7000 level, for the Australians it’s a good deal further away at 0.7400. Both can be a little short of liquidity in European & North American sessions, although there are noticeably fewer market-makers on Kiwi. This can lead to some exaggerated movements which are likely to be reversed when the local liquidity arrives. These markets can also be vulnerable to Stop Running by those with the order books, and as this is well known, we’d expect speculative Buy Stop orders to be inserted to take advantage of just such a move. We’d be inclined to be long on the run up with Sell orders below the resistance levels to lock in some profit and then re-establish on any dips. And that’s the thing with Aussie & Kiwi – it can be volatile and as long as you remain under-committed you generally get a second bite at the cherry.