29 Apr 2015
AUD/USD could head towards 0.8250/0.8300 – Westpac
FXStreet (Edinburgh) - A continuation of the upbeat momentum in the pair could see it advancing to the 0.8250/0.8300 levels, noted strategists at Westpac.
Key Quotes
“AUD/USD has finally gained some traction from the steep bounce in iron ore prices, despite the less impressive rally in longer dated contracts”.
“This has reinforced the optimism over China's monetary policy settings, with a range of stories doing the rounds. Certainly something seems to be afoot”.
“Uncertainty over the May RBA decision has also helped AUD outperform on crosses. But there is an obvious limit to the further gains AUD can expect from the notion of a surprise steady hand next week”.
“There is nothing to suggest the RBA is suddenly unconcerned about AUD, so pricing for a cut on Tue is likely to linger >50% if AUD/USD hovers around 0.80 into the meeting”.
“Westpac's view remains that the RBA will cut on Tue and not specifically indicate that 2.0% is the cycle low. This should help keep a lid on an otherwise buoyant AUD/USD, with fuel from short-covering of spec positions that were still very large as of the latest CFTC data. Any post-RBA dip to 0.7850 would be a buying opportunity”.
“A positive medium term momentum bias underpins the recent impulsive rise. This week’s break of range highs at 0.7910/40 targets a minimum extension to 0.8250/0.8300”.
Key Quotes
“AUD/USD has finally gained some traction from the steep bounce in iron ore prices, despite the less impressive rally in longer dated contracts”.
“This has reinforced the optimism over China's monetary policy settings, with a range of stories doing the rounds. Certainly something seems to be afoot”.
“Uncertainty over the May RBA decision has also helped AUD outperform on crosses. But there is an obvious limit to the further gains AUD can expect from the notion of a surprise steady hand next week”.
“There is nothing to suggest the RBA is suddenly unconcerned about AUD, so pricing for a cut on Tue is likely to linger >50% if AUD/USD hovers around 0.80 into the meeting”.
“Westpac's view remains that the RBA will cut on Tue and not specifically indicate that 2.0% is the cycle low. This should help keep a lid on an otherwise buoyant AUD/USD, with fuel from short-covering of spec positions that were still very large as of the latest CFTC data. Any post-RBA dip to 0.7850 would be a buying opportunity”.
“A positive medium term momentum bias underpins the recent impulsive rise. This week’s break of range highs at 0.7910/40 targets a minimum extension to 0.8250/0.8300”.