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Forex: AUD/NZD cracks 1.20 on outright offers post RBA
FXstreet.com (Barcelona) - Following the unprecedented move by the RBA to cut by another 0.25 bp to now set the official benchmark interest rate at 2.75%, the lowest since records began in June 1959, the AUD/NZD is succumbing below the psychological 1.20 number, reaching a fresh 3 ½ year low at 1.1948.
According to Sean Lee, founder at FXWW: "The only reason to buy AUD at the moment is to take profit on existing shorts and I see no reason to consider going long the AUD against any of the other majors."
Technical levels on the upside are seen at 1.20 up to 1.2010, previous support turned resistance, ahead of congestion area at 1.2025/45, an area which seems hard to recover in the near future as RBA/RBNZ monetary policy outlook stands.
On the downside, the 2009 October low at 1.1930/40 provides initial support, however, it is difficult to identify a solid demand area now until 1.16, Oct/Nov 2008 highs. Before that level, which remains far from current levels, 1.1835 - 61.8% fib retrac from the 2008/2011 rally - may provide decent support too.