AUD/NZD bulls remain well in control, but watch bearish Aussie below 0.7600

AUD/NZD has been on a steep and aggressive advance this month, extending the end of September's recovery from 1.0470 territory and the cross has moved through and onto the 1.06 handle again overnight.

The bird continues to suffer on the disappointing dairy auction, a stronger greenback again this week and a technical drop in the 4hr head and shoulders breaking to the downside below the neckline while the Aussie has so far managed to cling not a technical support around the 0.76 handle.

Australia released its trade balance for August and the median estimate was $2.3bn while both exports and imports were expected to fall slightly. The deficit on the month not as wide as expected, in at -2010m. Prior was revised to -2121mln from -2410m while goods and services imports at 0% change on the month with exports were also unchanged for the month.

Analysts at Westpac offered a market outlook for AUD/NZD:

"AUD/NZD 1 day: Retains upward momentum, and should consolidate above 1.0600. The next major target area is 1.0750 area.

AUD/NZD 1-3 month: A break above 1.0600 looms, the RBA likely to remain on hold this year while the RBNZ should ease further. Moreover, the cross remains well below fair value estimates implied by interest rates, commodity prices and risk sentiment. (3 Oct)."