The interlinked fates of Aussie & Kiwi
Both Aussie (AUDUSD) and Kiwi (NZDUSD) breached neckline support levels in today’s trading, with the stage now set for further losses. However, these losses may not be as closely linked as the charts might first indicate. We expect an area of support for AUD in the 0.7050/90 zone, but feel Kiwi may have a little further to travel. Here we would expect some interim support around 0.6700, but that ultimately a return to low 0.65’s is achievable. Since both pairs are quoted with US Dollars as the Term Currency, points in these can quickly become expensive/valuable when running good size positions. It’s always worth bearing in mind that even as Minor currencies, liquidity in both markets is not comparable to some of their stablemates, and caution should be exercised during European & North American markets for this reason.