New Zealand Cuts RatesDespite the fact that we are looking at the Australian dollar, you need to keep in mind that the central bank in New Zealand cut interest rates by 50 basis points overnight, so that has a bit of a knock on effect on the Australian dollar. While the interest rate differential still favors the Aussie dollar, that might have traders questioning whether or not Austria will be next to cut rates. Because of this, although I am bullish of this market, I recognize that you may have to temper some of your expectations, at least as far as momentum is concerned.If we were to break above the ¥101.75 level, then I think he gives us the “all clear” to continue going higher. At that point in time, the Aussie could go looking to the ¥105 level. In general, we are going back and forth in a relatively tight range, and it’s probably worth noting that the 200 Day EMA sits just below, and also has the 50 Day EMA approaching it, and getting ready to cross it, kicking off the so-called “golden cross.”Because of this, longer-term traders might be paying close attention to this pair through the prism of the carry trade, as you get paid at the end of every day to hold onto the Aussie dollar in relation to the Japanese yen, which is backed by the Bank of Japan and its altar loose monetary policy. I remain bullish, but I also recognize that it could be noisy overall.More By This Author:CAD/JPY Forex Signal: Canadian Dollar Pulls Back Against Japanese YenS&P 500 Forecast: Pulls Back to the Previous Support LevelPairs In Focus – Sunday, Oct. 6
