AUDNZD is likely to grow again after the pullback

30 September 2022 123
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The decline of the AUDNZD pair within the late August and early September market correction quickly faded away, as it was predicted. The growing trend retains its strength. Right now, it’s important not to take too much risk and open positions with the expectation of further growth not of local highs, but after a pullback.

 

This week, quotes have renewed their five-year highs, it’s slightly below 1.15. The RSI indicator showed an overbought condition, and now a natural correction may be seen. “Bulls” expect new signals, and these signals will appear on the foreign exchange market in the first half of next week.

 

New Zealand (RBNZ) central banks as well as the Australian (RBA) will hold the meetings in early October. The RBA will decide on Tuesday, while the RBNZ will make its decision on Wednesday. It’s expected that both interest rates would be increased by 0.5%. Much more interesting are the comments of officials. Depending on them, market participants will make forecasts regarding the prospects for the end of the cycle of tightening monetary policy.

 

Given that the RBNZ was the first among the central banks of developed countries to begin the current cycle of raising rates, it also has a high chance to finish it first (not counting emergency measures of the Bank of England). In any case, the rise of the key rate to 3.5% as well as the prospects of overcoming the 4% in the coming months don’t help the New Zealand dollar too much. The growing trade deficit is taking a toll.

 

The Australian currency looks stronger (or at least not so weak) compared to the New Zealand dollar. AUDNZD will strive for new peaks, until there are prerequisites for changing the current position.

 

The RSI adjustment was successful, it’s no longer overbought. Thus, AUDNZD is ready for growth again. However, until Tuesday, it’s possible to open a deal at more beneficial levels, which are around 1.13.

 


The following trade strategies may be suggested:

 

Buy AUDNZD, in case it goes down to 1.13. Take profit 1 - 1.14. Take Profit 2 – 1.145. Stop loss - 1.125.

 

Also, traders, at their discretion, can use the Trailing stop instead of the fixed Stop loss.

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