AUD/USD: time to join sellers
AUD/USD rose to 2-week high at $0.9305 on Thursday, but then returned down to the minimal levels since 2010 at $0.9038/37 hit last week.
Aussie got under renewed pressure due to the bets that the Reserve bank of Australia will cut interest rates in August from an already record low of 2.75%. According to swaps data compiled by Bloomberg, traders estimate the possibility of a cut by 75%.
Bank of America Merrill Lynch point out that AUD/USD has failed to extend more to the topside, while Shanghai Composite, gold and copper showed good gains. In their view, it’s time to sell Aussie. Any jumps to $0.9200/9250 will be a good selling opportunity. The specialists recommend setting stop at $0.9310 and targeting $0.8664 and probably $0.8066.
Credit Suisse says that Australian dollar is still overvalued and that the fair exchange rate for AUD/USD is $0.7000.
Chart. Weekly AUD/USD