The Amazing Rally

270 pips up today. Yes, it is an amazing rally for the AUD/NZD pair.

Of course strong and interesting fundamentals are staying behind the scene. And turned that it’s not a scene, it’s a macro news race.  

The day started with better-than-expected figures on employment data in Australia and next on the agenda came China’s GDP, showing slowdown in the third quarter. Having in mind that China is the Australia’s largest trading partner, both news had well supported the Australian dollar. As I already mentioned in my previous post, today it became clear that in New Zealand the First Party will be coalited with Labor and Greens to form a government and this announcement was not well accepted by the markets because the risk of taking measures for correcting the New Zealand dollar overvaluation by the new government is increasing. This is about to change the interest rate differential between New Zealand and Australia in next months and would appreciate even higher the exchange rate of AUD/NZD.From a technical viewpoint, the AUD/NZD is showing strong bullish signs, because first of all since April 2015 we are witnessing higher lows. Meanwhile on the four hour time frame the price is well above all its moving averages. The 20-day SMA turned to bullish and crossed to above the flat 200-day SMA with also having 100-day SMA uptrending. RSI and stochastic are located within extreme overbought conditions and are starting to ease over there. Today a new 2017 high was marked at 1.1224 and currently the pair slightly retreated to 1.1207. According to indicators, that might show some exhaustion, in the short term we may expect a pullback. Until then I remain bullish on this pair unless we see formation of a clear reversal pattern at the upper levels.