AUD/USD dipped below $0.9600
Aussie dollar extends the downside, driven down by the weak Chinese manufacturing PMI (prelim. May estimate: 49.6, forecast: 50.5). On Thursday AUD/USD renewed an 11-week low at $0.9595, but then quickly recovered back to $0.9680.
Despite the fact that yesterday Ben Bernanke said it was too early to taper QE, he actually didn’t deny that US is on the way to the “exit”, so the greenback’s prospects are not so bad. Falling commodity prices are increasing the pressure on the Aussie.
Trader sentiment towards the Aussie remains bearish despite the strongly oversold market conditions. Next support is seen at $0.9570 (2012 low). We would expect a bullish correction to start from here, but buying the Aussie remains a risky trade. We will be prepared to sell the pair on rallies from $0.9840 as the AUD/USD’s drop seems to be structural. Commerzbank’s medium-term target lies at $0.9400/9380.
Chart. Daily AUD/USD