Short AUD/NZD (From 17-Oct to 18-Oct)
Real-Time AmpGFX – Sold AUD/NZD to square long position (Thu 10/18/2018 9:46 AM MT)
Sold one unit of AUD/NZD at 1.0855
Comment
The AUD may struggle more than NZD on concerns that appear to be still building over China.
China mainland equities fell sharply on Thursday to new lows, and CNY continues to slide.
Oil prices are also weakening in recent sessions, and that takes away some of the stronger outlook for Australian commodities.
The rate and commodity spreads still suggest AUD/NZD is cheap. Economic trends appear stronger in Australia, although the Australian housing market weakness appears to be intensifying.
We were watching the 1.0860 level today as a short-term technical pivot.
After taking on risk in EUR/USD, we were less inclined to carry risk in AUD/NZD
Position
Short one unit EUR/USD at 1.1494; s/l 1.1558; t/p 1.1358 (capital at risk 0.58%)
Real-Time AmpGFX – Bought AUD/NZD (Wed 10/17/2018 6:50 PM MT)
Bought one unit of AUD/NZD at 1.0895
Comment
The AUD/NZD has fallen recently despite higher relative commodity prices and a higher rate advantage.
The Australian labour data showed a large fall in the unemployment rate to near what is considered full employment, removing one potential near-term risk element for the AUD.
NZD strengthened after the recent stronger than expected NZ CPI data, but the underlying measures were little changed from Q2 and should have limited impact on the RBNZ rates outlook.
Position
Long one unit AUD/NZD at 1.0895; s/l 1.0813; t/p 1.1043 (capital at risk 0.76%)