Forex: AUD/NZD on track for 6th daily gains; 1.2375 resistance eyed

A solid downtrend in place since early this year has been the AUD/NZD, as speculators mounted to bet on a hawkish RBNZ against a still dovish RBA. How much the picture has changed since the strong bounce off 1.2120? Judging by the vigorous AUD rise, looks like buyers are starting to gain short term control, with the 20ema on the daily being under threat.

The pair has some particular characteristics not enjoyed by others, that is, it is almost immune to the 'risk-on' 'risk-off' paradigm, to instead, have the main driver setting the pair's exchange rate, almost fully, on monetary policy expectations.

In the policies front, over the past week, with RBNZ Governor threats of intervention - temporarily scaring off some NZD longs - coupled with the ongoing RBA Stevens speech at the Australian House of Representatives, in which he does not sound as someone who is about to embark upon further rates, the AUD/NZD has reacted accordingly, and is printing its sixth consecutive daily gains. Key resistance may be taken at 1.2375, Oct 2012 low. Above this level, more evidence of a change in trend may be given.