Sean Callow, Research Analyst at Westpac, suggests that holiday-thinned northern hemisphere markets don’t suggest that a range break is imminent for AUD/USD pair as it has traded a mere 1 ¾ cent range since mid-June, unable to break either 0.7300 or 0.7500.
Key Quotes
“Both leveraged funds and asset managers are already net short AUD, though leveraged positions are modest by historical standards.”
“These positions could be extended if there is yet more bad news on US-China trade. With some justification, US equities have been resilient to the deepening trade tensions but Asia is not so sanguine.”
“Industrial commodities are also feeling the weight of trade tensions. If this remains the case then AUD/USD should explore the weak side of the range, in the low-mid-0.73s.”
Share
