Stay short AUD: There are signs of stress in Australia – BNPP

By FXStreet FXStreet (Delhi) – Research Team at BNP Paribas, added a short AUDUSD recommendation to their portfolio (entry 0.7335, target 0.70, stop 0.7450) as they argue that AUDUSD appears unsustainable above 0.73 especially as the Fed starts to hike rates.

Key Quotes

“New data this morning in Australia supports this view with the October trade deficit widening substantially and unexpectedly to AUD 3.3 billion from AUD 2.3 billion a month earlier. This number breaks an improving trend in this series since April 2015.”

“The fall in iron ore prices will continue to weigh on AUDUSD despite robust output from local miners especially given the increase in supply that is now coming online with the opening of new mines in Australia. Our BNP Paribas STEER™ model signals that short-term AUDUSD fairvalue is now 0.7145.”
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Source:: FX Street