AUD/USD: Australian dollar vulnerable to bouts of risk off – CitiBank
|Analysts at Citibank consider that the Australian dollar is vulnerable to risk aversion in the short-term. Their AUD/USD three-month target stands at 0.62 while they consider it will recover later, reaching 0.67 in a six to twelve-month period.
Key Quotes:
“US economy loses 20.5 million job losses in April and the unemployment rate rose to 14.7%, but it was better than expectation and support USD, limiting AUD’s performance. Australia's trade surplus spiked to a record AUD10.6 billion in March, beating market expectations and supporting AUD.”
“In the short term, AUD will be vulnerable to bouts of risk off, especially as growth expectations still need to be revised lower. However, Australia will likely benefit from its strong links to China. China has taken more proactive easing steps recently and eventually this should feed through to the Australian economy.”
“AUDUSD’s RSI is approaching overbought territory and may cap the upside room in the short term with main resistance between 0.6672-0.6685. The support may find in between 0.6214-0.6254.”
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