AUD / NZD rejected at $ 1.06 Political divergence and weak chart Make it test $ 1.04 low, says PrimeXBT analyst Kim Chua

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Last updated August 6, 2021 11:24 am

divergence of monetary policy between countries is beginning to show its effects on the currency market and this trend could become the main theme driving currency movements for the rest of this year.

Aussie and New Zealand dollar closed slightly lower last week after gains from a promising midweek rally were wiped out by domestic economic concerns, central bank decisions and a decrease in risk appetite.

Divergences in political support are one source of the growing global gap in the wake of the pandemic. We are seeing continued substantial fiscal support in advanced economies with $ 4.6 trillion of announced pandemic-related measures available in 2021 and beyond.

As more countries clarify their monetary policy stance, we may see more such operations that are relatively easy to carry out. AUD and the NZD in particular have two conflicting policies and this has opened the opportunity for traders to short the AUD against the NZD.

AUD / NZD pair is about to break out of $ 1.05 after returning above its old resistance area at $ 1.06 early last week, which provided a great entry point for traders to open a short trade.

On the daily chart, the AUD / NZD was below the sell high of 1,081 reached on June 11. downtrend line should act as a barrier to the bulls and also keep the price low.

Also read Bitcoin, Ethereum and the main Altcoins locked in the key range

Since it was strongly rejected at $ 1.06, the price has weakened a bit and broke the provisional support at $ 1.0540. While the price may fluctuate around this level for a short time, the breakout still paved the way for a drop towards $ 1.04, he explains. PrimeXBT Analyst Kim Chua

About Kim Chua, PrimeXBT Market Analyst:

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Kim Chua is an institutional trade specialist with a track record of success that extends to major banks including Deutsche Bank, China Merchants Bank, and others. Subsequently, Chua launched a hedge fund that has consistently achieved triple-digit returns for seven years. Chua is also an educator at heart who has developed her own proprietary trading curriculum to pass her knowledge on to a new generation of analysts. Kim Chua actively follows crypto and traditional markets closely and is eager to find future trading and investment opportunities as the two very different asset classes begin to converge.

I note: information in this article and the links provided are for general information purposes only and should not constitute any financial or investment advice. We recommend that you do your research or consult a professional before making financial decisions. Please acknowledge that we are not responsible for any loss caused by information on this website.

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