Morgan Stanley maintains an AUD/USD sell-on rallies strategy, while holding the view that if the pair manages to stay below 0.9000, it would open the way towards its 0.8800 target.
"AUDUSD has continued to accelerate to the downside, partly driven by weakening data from China and falling risk sentiment into the FOMC," MS notes.
"We have added China to the list of risks that we believe are now likely to challenge the global risk environment: The continued weak data from China are likely to add to growth worries. This moves AUD back into the spotlight, and the bearish signals following the recent sharp AUDUSD fall suggest that further declines are likely," MS argues.
"From a technical perspective, AUDUSD is now approaching the 61.8% retracement level at 0.8982, and a move below here could open the way towards the 0.8924 low initially and then 0.8891," MS projects.
"While we remain bearish, we see better risk/reward selling at 0.9150, which is between the 38.2% and 50% retracement of the recent decline," MS advises.
In line with this view, MS runs a limit order to sell AUD/USD as a short-term trade at 0.9150, with a stop at 0.9250, and a target at 0.8800.
'This content has been provided under specific arrangement with eFXnews.'
eFXnews is a financial news and information service. Articles and other information distributed in this service and published on this site are provided in general terms and do not take account of or address any individual user's position. To the extent that some of these articles include suggestions as to various possible investment strategies which users might consider, they do so in only general terms without reference to the personal factors which should determine any user's investment decisions to buy or sell a specific security or currency.
The service and the content of this site are provided and distributed on the basis of “AS IS” without warranties of any kind either, express or implied, including without limitations, warranties of title or implied warranties of merchantability or fitness for a particular purpose. eFXnews and its employees, officers, directors, agents, and licensors do not also warrant the accuracy, completeness or timeliness of the information in any of the articles and other information distributed in this service and included on this site, and eFXnews hereby disclaims any such express or implied warranties; and, you hereby acknowledge that use of the service and the content of this site is at you sole risk.
In no event shall eFXnews and its employees, officers, directors, agents, and licensors will be liable to you or any third party or anyone else for any decision made or action taken by you in your reliance on any strategy and/or advice included in any article and other information distributed in this service and published in this site.
Recommended Content
Editors’ Picks
AUD/USD gains momentum above 0.6500 ahead of Australian Retail Sales data
AUD/USD trades in positive territory for six consecutive days around 0.6535 during the early Asian session on Monday. The upward momentum of the pair is bolstered by the hawkish stance from the Reserve Bank of Australia after the recent release of Consumer Price Index inflation data last week.
EUR/USD holds positive ground above 1.0700, eyes on German CPI data
EUR/USD trades on a stronger note around 1.0710 during the early Asian trading hours on Monday. The weaker US Dollar below the 106.00 mark provides some support to the major pair.
Gold trades on a softer note below $2,350 on hotter-than-expected US inflation data
Gold price trades on a softer note near $2,335 on Monday during the early Asian session. The recent US economic data showed that US inflationary pressures staying firm, which has added further to market doubts about near-term US Federal Reserve rate cuts.
Ethereum fees drops to lowest level since October, ETH sustains above $3,200
Ethereum’s high transaction fees has been a sticky issue for the blockchain in the past. This led to Layer 2 chains and scaling solutions developing alternatives for users looking to transact at a lower cost.
Week ahead: Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.