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AUDUSD Long oppertunity

Updated: May 8, 2022

25th April - AUD into the 4th week of losses after a sharp sell off to start the week - the weekly open has went untested at 0.7250 given reason to believe we will retest this level at the first instance this week.


The Macros


AUD has seen sharp deprecation against the USD due to the RBA lagging the FED with their policy tightening, coupled with lower demand for commodity exports amid lockdowns in China. On the plus side, core inflation figures are accelerating as is wage growth which could provide the motive needed to the RBA to begin policy tightening sooner than originally expected, raising rates in June.


Technically


We have ran into march lows at 0.7150 clearing out liquidity which could provide a catalyst for buy ins. If the market can't hold this level for the time being we will look for a further dip in order to buy AUD as we believe sentiment surrounding the AUD could be facing a shift in Q2 and into Q3.




Strategy


Although the macro view is a medium term perspective, the technicals are pointing towards a bounce at least in the near term given our first target at the weekly open of 0.7250. A break below 0.7160 would negate this short term bounce and we will continue to monitor for further opportunities to buy in. Assuming commodity prices remain relatively strong we believe strength could return to AUD given a move back towards 0.7500.



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