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AUD/NZD Approaching Key Support
When it comes to currency strength neither the Aussie nor the Kiwi exactly take the top spot this year. Both high yielders have gotten decimated by the rout in commodities but between the two the Aussie is a bigger threat to fall further and that makes AUD/NZD a prime candidate to break its long term support level near the 1.1000 figure.
The market is becoming very concerned that the Australian economy is about to tip into a recession and the latest news on Glencore is not helping matters. Meanwhile in New Zealand the price of dairy goods appears to have bottomed and that means that NZ incomes will stabilize at worst and may rise in the best case scenario. That suggests that RBNZ will keep its rates steady while the RBA may be forced to cut once again. The moment the market becomes convinced that this is the case the AUD/NZD cross will begin to tumble through support