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Analysts at Credit Suisse expect the USD to depreciate on a broad basis and the preferred expression of this view is still the pro-cyclical Commodity currencies such as the aussie. AUD/USD is forecast to be capped by the 0.7574/7638 area in early 2021 but the pair should reach the 2018 high of 0.8136 later in the year. 

Key quotes

“AUD/USD remains in a clear medium-term uptrend after completing a major ‘head and shoulders’ base in July and has already reached our first core upside objective at a cluster of long-term Fibonacci retracements at 0.7574/7638, which is expected to cap the market early on in 2021.”

“The basing structure is substantial enough in size to suggest that AUD/USD has the potential to test the key 0.8136 high of 2018 later in the year. This, in addition to the 50% retracement of the entire 2011/2020 fall just above at 0.8296, is likely to be a tougher barrier. It’s worth highlighting that the ‘measured base objective’ is much higher at 0.8600/06, which could be reached over the long-term should the USD enter a structural bear market.”