The Australian dollar enjoyed the “no-change” decision from the RBA and made a move above 0.72.
The team at BNP Paribas suggests selling rallies from here:
Here is their view, courtesy of eFXnews:
The RBA left the policy rate unchanged at 2.0%, versus market pricing for 30% probability of a 25bp rate cut and im sympathy AUD is a touch firmer.
In this regard, BNP Paribas favors fading any rallies above 0.7200 in AUDUSD for the following 3 reasons:
“1) BNPP Positioning Analysis signals FX investors no longer hold a sizeable short AUD position following last month’s rally;
2) the bounce in AUDUSD in recent days has brought the pair back towards its STEER fair-value, indicating room for a further squeeze higher is more limited;
and 3) the RBA remains highly sensitive to AUD strength,” BNPP clarifies.
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