I’m still holding off on calling a base in the AUD/USD as we could get some extended sideways trading between .8900/.9150 but the case for the contrarian bulls is looking much stronger. China is still the main driver but this time it’s not Chinese imports of iron ore but Chinese money flowing into Australasian capital markets.
Sources in the prime brokerage market suggest that there are still plenty of sellers on the approach to .9150 in AUD/USD which will prove tough to budge but that a break above .9200 will swing momentum very heavily in the bulls favour.
There have been large selling flows in GBP/NZD over the last few days and I get the sense that the NZD top-pickers are about to throw in the towel. Yesterday’s historic currency agreement between China and New Zealand will also greatly improve NZD sentiment.
Buying dips in both AUD/USD and NZD/USD is definitely my preferred strategy.