Long AUDNZD Idea- Weekly Inverted H&S+Renewed Policy Divergence

The weekly chart shows a very interesting inverted head & shoulders pattern following a significant AUD decline against the NZD after breaking, but failing to hold below the December 2005 lows. With the renewed dovish tone of the RBNZ after disappointing dairy prices, and even more disappointing consumer price figures, this looks to be a good opportunity for medium term longs on the AUDNZD. The RBA continues to remain on hold with the 30 Day Interbank Cash Rate Futures suggesting a 94% probability of no change, while expectations for further cuts by the RBNZ have increased from 8% to 40% since the latest statement, according the current OIS market. This pair also limits the exposure to falling commodities and risk tone considering both the Aussie and Kiwi are higher yielding commodity currencies.