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8 Jul 2013
Flash: Buy AUD/NZD targeting 1.2130/70 - Societe Generale
FXstreet.com (Barcelona) - Both from a technical and medium term valuation point of view AUD/NZD has reached extremely oversold levels, says Sebastien Galy, Currency Strategist at Societe Generale.
In view of Galy, the New Zealand Dollar economy will now start to catch-up with the worsening outlook in China, and as the USD rises, "it should lead to a sharp retracement higher in AUD/NZD" Galy said.
Galy suggests to "buy AUD/NZD at 1.1770 targeting 1.2130/70 stop loss 1.1570." The risk to this trade, according to Galy, "is that the market is surprised by the resilience of the NZ economy, or that AUD, as a main proxy for the Chinese slowdown could conceivably fall sharply on its own in a hard landing."
In view of Galy, the New Zealand Dollar economy will now start to catch-up with the worsening outlook in China, and as the USD rises, "it should lead to a sharp retracement higher in AUD/NZD" Galy said.
Galy suggests to "buy AUD/NZD at 1.1770 targeting 1.2130/70 stop loss 1.1570." The risk to this trade, according to Galy, "is that the market is surprised by the resilience of the NZ economy, or that AUD, as a main proxy for the Chinese slowdown could conceivably fall sharply on its own in a hard landing."