AUD/NZD: Breaks above 1.3100

Looks like we are headed back into blue sky territory for this cross. The inability to sustain prices below 1.30 has resulted in a swift move back to 1.31. Players are of course divided on the cross. Most prefer to play from the long side given the favourable differential whilst it remains of course a standout fundamental trade. One exports coal, iron ore etc, whilst the other exports milk, sheep and rugby players. One has interest rates set at 4.25% and looking to go up whilst the other is at 2.5% with only a hint that they will rise again sometime in the future. That said the big stopper on the cross is always positioning. The market gets two one-sided from time to time and we see some massive clean-outs. This time round the recent moves suggest to me that the market is not long and the cross wants to go higher.