Australian And New Zealand Dollars Defer Breakouts To Next Week

Low liquidity has not translated into a rise into volatility for the currency market. With constricting ranges and sturdy trends setting in, the probabilities for at least short-term breakouts next week is growing exponentially.

Chief Strategist - Antonio Sousa

My picks: Short AUD/JPY
Expertise: Fundamentals and Sentiment
Average Time Frame of Trades: 1 week - 3 months

I have been short AUD/JPY since the beginning of October and I expect the Australian dollar to fall further against the Japanese yen going forward. Indeed, with the global economy slowing down the demand for commodities will also probably dry up which could mean further losses to commodity sensitive currencies like the Australian dollar. In addition, deleveraging in the financial sector, high exchange rate volatility and new banking regulation on excessive leverage could make carry trade very difficult going forward.

Currency Strategist - John Kicklighter

My picks: Short AUDUSD
Expertise: Combining Money Management with Fundamental and Technical Analysis
Average Time Frame of Trades: 3 days - 1 week

Volatility has summarily contracted through the second half of this week and the Australian and New Zealand dollar crosses have subsequently seen trends curbed and congestion build further into breakout setups. While I have been watching AUDCAD and AUDNZD for some time now, my interst with today's price action falls to AUDUSD. In the build up to today's price action, the pair was being guided by a steady rising trend from the November 19th bullish reversal. However, resistance at 0.66 proved to great for the dying trend and eventually marked a break from the trend to short-term congestion.

I'm not too concerned with price action from the past few days as the low liquidity conditions have altered the normal development of price action. However, the sidelined trend does offer new opportunities. For direction, I'm looking to next week's event risk risk. There are a few US indicators on deck, but my main interest is in the Australian docket. The RBA's rate decision is expected to result in another major rate cut, which directly contrasts the Fed's ability to adjust rates. Should the monetary authority surprise to the downside (a good probability), it could easily turn the trend break to congestion into a reversal scenario.

Currency Strategist - Terri Belkas

My picks: Short NZD/USD
Expertise: Fundamentals Combined With Technicals
Average Time Frame of Trades: 1 - 3 Days

With many traders taking the end of the week off for the US Thanksgiving holiday, most currency pairs have done little but consolidate. Focusing on NZD/USD, price has held below trendline resistance going back to late September and the 38.2% fib of .6132 - .5196 at .5554. This may provide an opportunity to sell NZD/USD near current levels to target the 61.8% fib of .5196-.5591, and stops should be placed above noted resistance.

Currency Analyst - Ilya Spivak

My picks: Long AUDNZD
Expertise: Macro Fundamentals, Classic Technical Analysis
Average Time Frame of Trades: 1 week - 6 months

While volatility has gripped much of the forex market in recent weeks, the Australian dollar has been rising in an orderly uptrend against its New Zealand counterpart since late October. The pair now looks set to break resistance at 1.1900, the 76.4% Fibonacci retracement of the 09/22-10/10 decline. Support is offered by a upward sloping trend line connecting recent highs. Enter long targeting just below 1.22, the site of a price congestion area that served as effective resistance from mid-August into late September. Set stop loss under 1.1740, below yesterday's low and trend line support.

DailyFX

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