AUD/USD seems overdue to at least consolidate - Westpac

Sean Callow, Research Analyst at Westpac, notes that the US July jobs data interrupted the Aussie dollar rally, but not for long as AUD/USD fell about 0.5c in response but it took little more than 24 hours’ trade to recover its lost ground.

Key Quotes

“Part of AUD/USD resilience is the (understandable) lack of follow-through in pricing for a Fed hike in Sep, limiting USD gains.

Commodities also argue against attempts to pick a top in AUD/USD, with iron ore and coal (combined 27% of Australian exports) still trending higher. Having broken the mid-July high of 0.7676, we don’t see an obvious barrier to a test of 0.78 in coming sessions.

A note of caution comes from positioning – CME specs are only modestly long but AUD/USD has risen in 9 of the past 10 weeks so seems overdue to at least consolidate.”