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As the shifting risk sentiment continues to play out, the up-move in the cyclicals may still have some room to extend. Terence Wu, an FX strategist at OCBC Bank, prefers to buy the AUD on dips for now.

Key quotes 

“The 55-day MA (0.6406) limited the advance overnight, but that level was breached early on Tuesday.”

“Note that short term implied valuations continued to extend higher, perhaps signaling further upside bias for the pair.

“If the pair can stay north of 0.6406, expect it to build base for a further extension higher towards 0.6600-0.6700.”