Buy the dips in AUD/USD to 0.7110/20 – Westpac

Strategists at Westpac recommended buying the dips towards 0.7110/20 band in AUD/USD.

Key Quotes

“AUD/USD has suffered on the Fed-driven stronger USD and the background of the RBA’s easing bias”.

“But around 0.72, the Aussie is 5 cents below the pre-RBA rate cut levels and seems to be pricing in just about enough bad news”.

“Our expectation that both the Fed and RBA will hold steady in June should support AUD/USD in the month ahead and even this week, if Fed chair Yellen (Fri) does not add her voice to the hawks”.

“Commodity prices have become a bit more troublesome, with spot iron ore prices slipping to lows since early March. But the basket of Australia’s key export prices is still well up on the year”.

“AUD/USD should find buyers on dips towards 0.7110/20 support, trading mostly either side of 0.72, capped ahead of 0.7350”.