AUD/USD set to plunge as far as the 200-DMA at 0.7389 – Westpac

The clean break of the 0.7560 area suddenly makes a correction as far as the 200-day moving average at 0.7389 plausible. Broad USD mood is set to be key though, with H2 21 global growth prospects still robust, underpinning commodities, economists at Westpac report. 

See: AUD/USD to suffer a deep correction lower towards the 0.7240 zone – Credit Suisse

Aussie’s dip to lows since December harbingers a further decline 

“The big dollar is arguably the key factor at the moment, as the fiscal ‘rescue’ package stokes bank accounts, spending and confidence, only for President Biden to propose another huge spending boost, albeit more long term.” 

“If CNH is at a low vs USD since November then no surprise AUD/USD is also breaking ranges to the downside despite domestic positives such as hefty trade surpluses.” 

“The RBA on Tuesday should point to signs that the recovery is intact but also stress the substantial slack in the labour market which will be reinforced by layoffs from the end of JobKeeper.”

“Momentum should remain with USD for now, opening up 0.7450/70 or below (even near 200-DMA at 0.7389) but longer-term, A$ cyclical upswing looks intact.”