Australia’s Covid-19 trend is very encouraging but given the brutal economic data facing the world in coming weeks, equities should drag the AUD/USD pair back to 0.62- 0.63 or below, according to Westpac Institutional Bank.
Key quotes
“The Aussie is now testing the 100-dma around 0.6565 and bulls will target the 200-dma at 0.6687. Australia’s low daily infections and deaths add to the case for hope for the economy, backed by very large fiscal stimulus.”
“Risk appetite will at least become more two-way in coming weeks as awful economic and earnings data hits in waves around the world. Loosening of restrictions will be mostly very tentative and the prospect of second waves of infections or weak recoveries should undermine equities and in turn, AUD.”
“We would look to sell into AUD/USD in the high 0.65s, with 0.62-0.63 achievable multi-day/week.”
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