FUNDAMENTAL ANALYSIS


FX


Brexit and Eurozone, traders could focus on the following forex opportuni ty.


As China continues to create further growth in construction and property, the following currency pair AUD/NZD seems like a logical pair to tap on the growth in China’s booming real estate businesses. AUD/ NZD is currently slightly trading above its 20 years low. The lows were last tested in 1997, and 2006 respectively. The current levels are at 1.0917,


slightly Chart 3- AUD/NZD Daily


year that the Yuan’s value was broadly in line with economic fundamentals.


When President Trump labeled China a guilty currenc y


manipulator,


he complicated Treasur y Secretary Steven Mnuchin´s position during his first meeting with G20 Finance Ministers


in Baden-Baden on


25th March - and especially with Chinese Finance Minister Xiao Jie. However currency


manipulation


which had been controversial in previous G-20s was not problematic this time as Mnuchin mentioned


that, what was


communique was not necessarily


relevant


in the past from his


standpoint. Af ter the G-20 meeting, finance ministers agreed that


the matter


remains unclear and needs fur ther discussion, which doesn’t give investors a clear indication on how Trump administration’s


position


could impact the world’s trading system during 2017.


Market View Buy AUD/NZD


To avoid volatil ity due to fears of US interest hikes and problems deal ing with


above historical lows at 1.0090


China also continues to build stronger trade ties with Australia, and Australia is a major contributor to China’s raw steel and other commodity products, this is favourable for the AUD, comparable to New Zealand.


Preferred AUDNZD


level would to be


Buy at


1.0750, as shown on the Daily chart. With a Stop placed at 1.0450. Profit target at 1.1330.


Samuel Tay Founde r


Grentone Capi tal Management


FX TRADER MAGAZINE April - June 2017 47 the


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