AUD/USD: Further range-trading seems likely - Westpac

In view of Sean Callow, Research Analyst at Westpac, further range-trading seems likely for AUD/USD pair, from say 0.7550/70 to 0.7725/40.

Key Quotes

“Last week we highlighted the return of risk aversion as a notable AUD driver. This has continued in recent days, with early week jitters over the stalled Trump agenda undermining equities and seeing AUD/USD dip under 0.7600, slightly lower than the 0.7620 support we suggested.”

“The recovery in the risk mood since then has left AUD/USD about flat on the week at 0.7675 at time of writing. Further range-trading seems likely, from say 0.7550/70 to 0.7725/40. Lending support should be a bounce in Australia’s trade surplus in Feb, a mostly positive tone from the RBA and resilient investor sentiment in Asia.”

“Capping AUD/USD on probes above 0.77 though should be potential for US yields to press higher over the week and the persistent doubts over the sustainability of the past year’s bulk commodity price rally, which have kept the Aussie below the fair value levels shown across.”