AUD: Next level of resistance around 0.7720 - Westpac

Research Team at Westpac, suggests that despite all the bad news thrown at AUD (ratings outlook downgrade, waves of risk aversion out of Europe on UK property fund freezes, Italian banking system stresses), AUD has remained stubbornly resilient.

Key Quotes

“Global demand for high yields should continue to help support the currency. Above 0.7650 still seems expensive though. Our base case is still for a RBA cut in August following the Q2 inflation outcome. But until the end of the month it’s difficult to make the case for a sharp fall either.

Technical: Uptrend since late May holding but trend not very strong. If 0.7650 does give way, next level of resistance around 0.7720."