Bearish outlook intact
Although the Australian dollar mostly failed to react to the Reserve Bank of Australia’s overnight policy statement, we see scope for greater currency volatility in the immediate future as the countdown continues to (1) Thursday’s employment report (2) Friday’s batch of new RBA growth and inflation forecasts and (3) next week’s Budget. Having briefly traded up through 0.9450 in mid-April, the long-term AUDUSD downtrend has resumed in our view, and we look for further weakness ahead towards our 3m target of 0.86.
Read the full report: UBS