Morgan Stanley switches to bearish strategy citing the more challenging global investment environment developing as a result of higher US yields which has triggered a sharp decline in AUD/USD this week
"The Australian terms of trade data have continued to deteriorate sharply in 2Q, while building approvals have also slowed," MS notes.
Technically, MS sees AUD/USD break lower from the recent range through the 100 DMA weakening the outlook.
"We now return to a bearish strategy, looking to sell into rebounds in the 0.9350 area," MS oulintes its AUD beraish strtegy.
"We now look for a decline towards 0.9200/0.9185 initially, with the medium-term target now at 0.9000," MS projects.
In line with this view, MS runs a limit order to sell AUD/USD at 0.9350, with a stop at 0.9450 targeting 0.90.
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