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[DrunkenBrit]

Well, at a guess, you could always just hardcode it and position the balloon near the path the avatar moves along and when it gets to the position the balloon is in the world run the animation that moves his arm as if to strike the balloon.

If you've got variable moving speeds in there, i'd probably attempt to check the distance between the avatar and the balloon, once the avatar reaches a certain distance from balloon you could trigger the animation once to swing his arm (change the "trigger animation distance" between the avatar and balloon until you get it right).

I haven't worked with avatars before in depth, only through the tutorials so if there's a better/easier way someone else would have to jump in and assist you. Like I said, this is at a guess