Get Ready for the AUD to Sell-Off
Rowan Crosby • 1 min read
For regular readers, you might notice that I’m pretty bearish on the AUD/USD. Despite the fact that we continue to grind higher and I’ve recently been targeting a few long trades, over the coming months I expect that the AUD will make its way back down towards 75 cents.
Last week we saw a strong response to what was a weak US nonfarm payroll report. To me, that means that we have some strength in the USD. Whenever there is a positive move after negative news, indicates there is buying interest.
As such I’m looking for the USD to rise over the next week or so.
This week we have the next chapter of Aussie interest rates when the RBA tells everyone what is happening on Tuesday. This might be the spark to send the AUD lower.
It’s very unlikely that we will get any sort of change in policy and I suspect rates will be left on hold. Combined with a strong USD and we might be getting ready to push lower.
The charts certainly look strong at the moment, but overall an AUD at 80 cents is fundamentally too high for where the economy sits and what the RBA will accept.