12 May 2015
AUD/USD bid above 0.7788 – Westpac
FXStreet (Edinburgh) - Strategists at Westpac noted the bid tone around the AUD remains intact as long as spot trades above the 0.7788 level.
Key Quotes
“AUD tends not to set a clear new direction on the budget speech”.
“Even last year’s ambitious budget which appeared to have a significant impact on consumer sentiment did not have any visible impact on AUD when delivered”.
“This year’s projections of a slightly narrower deficit than the recent market talk might help AUD at the margin”.
“But overall the recent broad ranges should remain. Downside support around AUD/USD 0.7850/70 should continue to hold, with help from the iron ore price bounce, patchy USD sentiment given lukewarm data and only modest pricing for further RBA easing”.
“But any renewed probes to the 0.8000/50 area should again meet healthy selling interest, with China’s easing steps seen as too little too late and indeed no obvious strength in hard data from key Asian economies”.
“AUD spec short-covering also seems to have largely run its course, with specs more balanced”.
“Positive medium term/long term triggers keep us focused on the interim uptrend, despite a negative short term momentum bias. Above 0.7788 the uptrend remains in play. Target 0.8250/00”.
Key Quotes
“AUD tends not to set a clear new direction on the budget speech”.
“Even last year’s ambitious budget which appeared to have a significant impact on consumer sentiment did not have any visible impact on AUD when delivered”.
“This year’s projections of a slightly narrower deficit than the recent market talk might help AUD at the margin”.
“But overall the recent broad ranges should remain. Downside support around AUD/USD 0.7850/70 should continue to hold, with help from the iron ore price bounce, patchy USD sentiment given lukewarm data and only modest pricing for further RBA easing”.
“But any renewed probes to the 0.8000/50 area should again meet healthy selling interest, with China’s easing steps seen as too little too late and indeed no obvious strength in hard data from key Asian economies”.
“AUD spec short-covering also seems to have largely run its course, with specs more balanced”.
“Positive medium term/long term triggers keep us focused on the interim uptrend, despite a negative short term momentum bias. Above 0.7788 the uptrend remains in play. Target 0.8250/00”.