DailyFX Analysts Bullish Australian Dollars

Daily Forex Technicals | Written by DailyFX | Jul 25 08 14:37 GMT |

Top Pick: Australian Dollars There have been big moves in the Australian and New Zealand dollars. DailyFX Analysts are bullish Aussies and bearish Kiwis. Read on to find out why: Chief Currency Analyst - Kathy Lien My picks: Long AUD/NZD Expertise: Combining Fundamentals with Technicals Average Time Frame of Trades: 1-3 Days As per my Daily Fundamentals from yesterday, the currency that I am most bearish is the New Zealand dollar. One of the currencies that it has done the worst against is its counterpart, the Australian dollar. Fundamentally, the trade balance report is due for release on Sunday and I expect the number to continue to be kiwi bearish. Technically, AUD/NZD is still trading above its most recent breakzone at 1.2800 and its uptrend remains intact. Senior Currency Strategist - Boris Schlossberg My picks: Long AUDNZD Expertise: Fundamental Average Time Frame of Trades:6-24 hours Kiwi trade balance comes our sunday night and i am bearish the number. With RBNZ lowering rates the pressure on the kiwi continues. So my trade of the day is Long AUDNZD with 1.2915 stop Technical Currency Analyst - Jaime Saettle My picks: Short NZDUSD (from last week), stop .7761, target below .5927 Expertise: Technical Average Time Frame of Trades: 1 month (this one should be longer) Last week: "Expectations are for price to plunge later this year and eventually test the .5927. This NZDUSD short is setting up as one of the best opportunities in recent years. Longer term traders can short now against .7921" This week: Kiwi has tanked as expected. Risk can be moved to .7761. The best thing to do here is sit tight and enjoy the ride. If you've been following my longer term counts, you know that I expect wave C of a long term expanded flat to end below .5927 in the next several months. As the decline from .7761 matures, I'll be better able to pinpoint areas to add to (or initiate if late to the game) short positions. Currency Analyst - David Rodriguez My picks: AUD/JPY Long Expertise: System Trading Average Time Frame of Trades: 2-10 weeks Last week I wrote "If you're willing to allow for sizeable pullbacks, I would look to go long the AUDJPY at or near current market levels, placing max risk below a recent double-bottom at 101.50, with profit targets set at previous highs of 107.90." That trade is about 50 points in the hole right now, but my AUDJPY-bullish bias remains. The Aussie has been able to withstand a bearish onslaught from a clear sell-off in commodities, and continued demand for its high yields will (in my opinion) continue to drive it higher against the Japanese Yen. As such, I'd like to go long (or stay long) at current market levels, and place max risk below previous intraday lows of 102.13. Any standing positions from last week should have their stops adjusted accordingly. Currency Analyst - John Kicklighter My picks: Long AUDUSD Expertise: Combining Money Management with Fundamental and Technical Analysis Average Time Frame of Trades: 3 days - 1 week The high yielders seem to be in flux. A surprise 25-basis point rate cut from the RBNZ has shaken carry trade convictions for the kiwi dollar and its aussie counterpart seems to have been caught in the wave. However, looking at interest rate expectations, the market is still pricing in a hawkish bias from the the RBA through the coming year (though it is modest) while the New Zeland central bank is still looking at a cumulative 135 basis points of easing through the next 12 months. This would suggest a clear fundamental trade for long AUDNZD (which is technically strong as well); however the mature trend isn't where I'm looking today. Instead, AUDUSD is showing an attractive setup now after a four-session selloff to a rising trendline that is nearly a year in the making. Support is noted around 1.9525/35 where the aforementioned formation meets another short-term trendline and a confluence of fibs. In trading this, an entry as near to 0.9525 as possible would be ideal. For additional support though, there is a notable pivot level that has acted as a floor and ceiling to price action around 1.95. I will place my stops below this level (though not so far away to make the risk too great as this has been a momentous reversal and has a chance of turning into a major trend change). My position will comprise two lots, the first target will equal the risk taking on that lot; and the second will be more aggressive for around 150 points - though depending on how price action unfolds, I may allow the second lot to run as a confirmation of the dominate trend could push spot to new multi-decade highs. This optimal scenario aside, the fundamentals for a sustained rally may be in jeopardy. Already at such great heights, interest rate change expectations are certainly turning in favor of an aggressive Fed; there is a lot of premium built into a US recession and ongoing 18th year of Aussie growth; and event risk is growing. To avoild unscalable volatility, I'll be move up my stops very tight before Thursday's US 2Q GDP numbers and Friday's NFPs. Currency Analyst - Ilya Spivak My picks: Short NZDUSD on close below 0.7424 Expertise: Macro Fundamentals, Classic Technical Analysis Average Time Frame of Trades: 1 week - 6 months NZDUSD has been trading lower in a downward sloping channel since mid-March. The most recent decline began as the pair showed a Hanging Man candlestick at channel resistance near 0.77. The bearish move accelerated sharply lower when the RBNZ surprised the markets by cutting interest rates for the first time since 2003. Price action has now found support at 0.7424, the 50% Fibonacci retracement of the 08/17/07-02/27/08 rally. A break here opens the door for significantly more downside mometum to the 61.8% Fib at 0.7238. Strategy: Short NZDUSD (or add to existing short position) on a daily close below 0.7424, targeting 0.7238. Currency Analyst - John Rivera My picks: Short NZD/USD Expertise: Fundamentals Combined with Technicals Average Time Frame of Trades: 5-10 Days I am bearish the Kiwi as the country heads steadfast into a recession, expectations are that the RBNZ will have to cut rates several times over the next years to provide a soft landing for the economy. Considering that rates were at a record high the chances are strong that they will meet expectations. I expect the pair to fall until it meets support at 0.7241 the 61.8% Fibo of 0.6636-0.8205. DailyFX Disclaimer Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. 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