Daily Forex Technicals | Written by DailyFX | Sep 26 08 14:16 GMT |

Australian And New Zealand Dollars Promise Volatility As Market Awaits US Bailout Risk appetite throughout the financial markets holds carry sensitive pairs up to potential breakouts. However, with weekend liquidity rapidly approaching and an agreement on a US financial market bailout likely to be reached during the off-market hours; direction can take off in dramatically different directions. Read on to see how our DailyFX Analysts are positioning for the event risk: Senior Currency Strategist - Jamie Saettele My picks: AUDNZD short, against .8430, target .81 Expertise: Technical Average Time Frame of Trades: 1 month (this is short term....a few days at most) The AUDUSD is rolling over from its high at .8524 early this week. The decline is probably just a B wave within a larger correction. Still, price likely comes down into the Fibonacci zone of .8076-.8247. The 61.8% is at .8076. Currency Strategist - John Kicklighter My picks: Pending AUDUSD Expertise: Combining Money Management with Fundamental and Technical Analysis Average Time Frame of Trades: 3 days - 1 week The Australian and New Zealand dollar pairs are very dangerous to trade on any short-term basis as the weekend is approaching debate on the US financial bailout plan threatens to derail the market's calm. Trading any of these two currencies (and especially holding any positions over the weekend) would be taking a speculative call on the health of risk appetite as well as direction from either or both of these currencies. Therefore, it is important to have a plan that will be executed without emotion and takes into account both outcomes: the reassurance of workable plan or ongoing debate (perhaps also a plan that will fall well short of the market's needs); and the relief of receiving the massive blank check the Treasury and Fed are asking for. Both AUDUSD and NZDUSD provide excellent technicals in both directions, but the Aussie-backed major has been more attuned to back and forth (as its rate expectations aren't as dire as the kiwi). Should the policy makers received exactly what they are asking for, risk appetite would rebound; and the Aussie dollar would rally in turn. The major 61.8% retracement of the August 2007 to July 2008 rally matches with major former support at 0.85 for a good trigger level. Should a higher time frame candle close above this level, it would be very encouraging for a more engrossing rally. On the other hand, should the plan not get through before fears explode or the details be very disappointing, the recent congestion held up by the 38.2% retracement from the September 17th to 22nd advance at 0.8250 would be the line in the sand for further declines. A higher time frame close below this level will give a good signal for a follow through to the short side. Currency Analyst - David Rodriguez My picks: Short AUD/USD below 0.8500 Expertise: System Trading Average Time Frame of Trades: 2-10 weeks A failure at 0.8500 opens up a continued move to the downside, and as such, I'd like to get short around these levels. The overall medium term trend remains down in the AUDUSD--it's just a matter of waiting for the recent correction to finish. Currency Analyst - Ilya Spivak My picks: Pending Short NZDUSD Expertise: Macro Fundamentals, Classic Technical Analysis Average Time Frame of Trades: 1 week - 6 months Having found a bottom at the 0.65 level, NZDUSD corrected higher to surpass initial resistance at 0.6745, the 23.6% Fibonacci retracement of the 07/15-09/11 decline. Prices have since turned sideways between this and the 38.2% level at 0.6938. The broad trend is still firmly bearish. Should current consolidation see a top, we will look to sell on a daily close below 0.6745. Otherwise, a break higher meets significant resistance in the price congestion area ahead of the 50% level at 0.7096. For more details on NZDUSD and outlook on the other major pairs, please see the latest Fibonacci Weekly Report. Currency Analyst - David Song My picks: Short AUD/NZD Expertise: Fundamentals Combined with Technicals Average Time Frame of Trades: 2 Days - 2 Weeks After peaking to 1.2292 at the beginning of the week, the AUDNZD continues to face heavy selling pressures, and I anticipate the Aussie to weaken further in the weeks ahead. The pair has certainly failed to break above 1.2300 this week, which supports a short-term bearish outlook for the pair. I expect the Aussie-Kiwi to end the day near its lows, and we may see the pair break below 1.2000 next week to test 1.1985 for support on its way to the downside. I predict the underlying downtrend to hold in the near-term, and we may see the pair fall back towards last week's low of 1.1805. 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