AUD & NZD: Prefer to be short on the crosses
I’ve been watching pairs like EUR/AUD and GBP/NZD pretty closely over the last few weeks and both pairs are suggesting to me that they are trying to form a base for a healthy rebound. I have some fairly aggressive targets in 1.75 and 2.10 respectively (from current levels near 1.64 and 1.9650).
The economic stand-off between Australia and China is not showing any signs of improving and this is eventually going to have an impact on the AUD. Australian government stimuli packages are starting to ease off and an economy which relies heavily on overseas tourists and students is in for some very tough times ahead.
I am not a fan of the USD either in the current climate and would be cautious about being overly short AUD/USD. I expect some range trading here in a .69/.73 ish range over coming weeks.