Day four: potential AUD/NZD trade

AUD/NZD has reacted aggressively to both yesterday’s Australian Q2 CPI print and this morning’s RBNZ meeting, with the pair hitting a high of 1.0969.

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As detailed in ‘trader radar’, the market went into the RBNZ meeting expecting a hike, however the forward guidance from the central bank suggests it could be on hold for an extended period of time. Naturally the market has had to readjust and thus the market has pushed back its call for the next rate hike from December to March 2015.

My directional bias this week has been correct and my rationale has played out, however I missed the entry which is frustrating.

On the hourly chart the pair seems overbought and thus potential pullbacks to 1.0928 (the 38.2% retracement of the 1.0826 to 1.0969) could be a better area to work potential bids in the market. 

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