💱🔺AUD Rose As Short-Term Traders Stops Triggered: Cable FX Macro

• AUD/NZD breached 1.1300 to the upside on Wednesday session. Analysts and strategists are predominantly bullish on AUD/NZD in the short to medium term, citing divergent monetary policies: the RBA's potential rate holds versus the RBNZ's easing cycle.

• Strategists at UBS see the aussie/kiwi rate higher into year-end, they pencilled in the pair at 1.1400 as they cite bullish factors from precious metals rally, Australian economic data, and market positioning in the AUD. BofA holds a more bullish view, they placed a 1.20 target by mid-2026, the desk recommends investors to fade NZD strength as the N.Z. economy is set for further weakness ahead.

• Is this the start of a “recession” trade? We remind you that, historically, NZD is the worst performer in the G10 during U.S. recessions. While a U.S. output contraction is not a base case scenario, the prospects are not looking great from the labor data perspective.

• Australian dollar outperformance is set to make history this week, as we have not seen a winning streak of this magnitude since 1998. The move could have been extended by low options volume on the session and short-term traders stops triggered in AUD/USD.