AUD/USD: macro, model and techncial view – Westpac

By FXStreet Analysts at Westpac offered a macro, model and technical view on AUD/USD.

Key Quotes:

“Weak Chinese data over the weekend did see the A$ lower at the start of the week, however, price action since then suggests we have probably gone far enough for now.

The lack of urgency in the RBA minutes has added to this sense and we would not be surprised to see the A$ higher in the short term. However, while the minutes may have significantly reduced the chance of a June rate cut, our economics team is still expecting another rate cut in August post the Q2 CPI outcome. The minutes clearly placed a lot of emphasis on the outlook for inflation, so risks to the outlook remain to the downside. So a bounce much beyond 0.74/ 0.7450 is likely to be seen as a sell opportunity. Neutral AUD short term, looking for opportunities to sell into strength.

Model: The model trims its AUD short by 1.8ppts to 4.2%, a stronger growth signal thanks to last week’s 8.5% surge in consumer sentiment the main catalyst.

Technical: Signals somewhat mixed though on balance leaning towards AUD lower.”
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Source:: FX Street