Flight Instructor reported an NMAC event during landing training with a landing aircraft for a conflicting runway. Both aircraft made visual contact and both executed an evasive maneuver to avoid a collision.

Narrative

At approximately XA:00 local time while in a left closed traffic pattern for Runway XX at ZZZ with a student in a Cessna 152; a Cirrus announced an RNAV approach to Runway XY. At the same time a second aircraft announced they were maneuvering to enter the downwind traffic pattern leg for Runway XX. Following standard practice; radio calls were being made to announce each leg in the traffic pattern. Upon reporting that my student and I were turning final for Runway XX; the Cirrus pilot requested our position. As we reported a short (1/4 nm final); a colleague in another airplane was holding short of Runway XZ/XY with a clear view of the final approach corridor for Runway XY. He reported that it appeared to him that the Cirrus would land long. I spotted the Cirrus low and fast over the runway. At this moment both aircraft simultaneously executed a go around and were converging. The Cirrus was at a higher altitude. I assumed control of the aircraft; reduced power; maneuvered the aircraft and landed without incident on Runway XX.