I’m taking a line through AUD/NZD and USD/CHF in trying to figure out where NZD/USD is headed.
The AUD/NZD cross is heavily traded by the macro hedge fund community who like to buy and sit. The recent uptrend has stalled on the daily charts and is retracing fast, forcing stale longs to question their commitment. The downmove is now targeting levels around 1.2725/70 (61.8% 1.2070/1.3794 and the 100-week MA).
As long as USD/CHF continues on its present strong downtrend, the USD is likely to stay heavy across the board meaning that other major pairs, like AUD/USD, are likely to drift back toward recent range highs.
If AUD/USD returns to 1.10 and AUD/NZD falls to 1.2750, that means the NZD/USD would be trading around .8625. (Not today obviously but buying biggish dips in NZD/USD seems like the sensible strategy to me).
