ANZ - "· Look to re-instigate AUD/NZD longs at 1.2440, targeting a move to 1.2650. Set a stop at 1.2330 (we took profit on our long AUD/NZD trade at 1.2470, instigated 19 February at 1.2240)
· In New Zealand the risks look poised to the downside as the market focuses on the developing drought, and on Thursday’s RBNZ MPS.
· By contrast, Australian data this week is likely to exhibit strength, with the NAB Survey likely to reflect gains seen in the AiG survey, and February employment likely to jump by +20k.
(...) Technically, if the “rebound channel” holds, the way is open for a test of 1.2657. Indeed, since bouncing off oversold status, the AUD/NZD has developed a “rebound channel” and is now approaching a critical technical juncture. The resistance zone between 1.2465 and 1.2500 (also adding resistance as an important psychological number) is supported by the inner channel down-trend defined since August 2012. The 100-day moving average also adds resistance at 1.2530. Should the “rebound channel” hold and the cross breaks higher through the 1.2465/1.2500/1.2530 resistance zone, this targets a move up to the 200 day moving average at 1.2657."