Facts:
- The currency pair is currently seeing a slight correction of the long-term uptrend
- However, the difference in interest rates and their implied volatility this year favors the continuation of the upward trend on the pair
- The options market indicates that the trend over the next 3 months has a chance to continue even to the 2022 maximum zones
Recommendation:
Long position on AUDNZD at the market price
- TP1: 1.2500
- TP2: 1.3670
- SL: 1.0987
Opinion:
The currency pair is currently seeing a slight correction of the long-term uptrend, after the market now expects a slowdown in the pace of interest rate cuts in New Zealand. However, the difference in interest rates and their implied volatility this year favors the continuation of the uptrend on the pair. The options market (risk reversal strategy) indicates that the trend over the next 3 months is likely to continue even to the 2022 high zones.
Traders are advised to be particularly cautious about the asset, in view of the high volatility characteristic of the instrument. We recommend taking into account the levels of take profit and stop loss against this transaction (they were based on the zone of the last minima of the consolidation zone, below the 200-day EMA (stop loss) and the area of the local maxima of quotations from 2022 (take profit)).
Methodology and assumptions used:
The recommendation was based on technical analysis of the chart and price action of AUDNZD. The target level and stop loss order were placed in the zone of previous price reactions of supports and resistances. You can read more about this methodology here:
Source: xStation 5
