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AUD: Has Most To Lose On USD Reversal; Staying Short AUD/USD This Week – TD

AUD/USD continues to show strong volatility. What is the short-term outlook for the pair?

Here is their view, courtesy of eFXdata:

TD Research discusses the AUD outlook and maintains a tactical bearish bias,  expressing that  via  staying  short AUD/USD this week as its ToTW, with a target at 0.6125, and a stop at 0.6525.

“As markets start to collect more data on the health of the global economy, we anticipate another run higher in the USD. In the near-term, we suspect that most of the recent squeeze has run its course. AUD has been a major beneficiary of the surge in risk assets but probably has the most to lose on a reversal,” TD notes.

We were stopped out of our short AUDNZD* idea but remain short AUDUSD* as our TOTW…Short-term, we note that AUD’s large gap to HFFV makes it vulnerable to a setback in risk appetite even if the market is positioned short. Another (temporary) driver was likely repatriation by local pension funds. Even so,  we think the 0.60 level should offer good entry points for the months ahead, reflecting AUD’s unique mix of monpol, fiscal and valuation,” TD adds.

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Kenny Fisher

Kenny Fisher

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.