Analysts at BNP Paribas have initiated two short AUDUSD trade recommendations: through cash (targeting 0.74) and through buying the 9m risk-reversal which currently trades at 8-year levels of cheapness.
“AUDUSD has rallied to post US-election highs above 0.77 and this has corresponded with a build-up in long AUD positioning to a score of +31 (on our scale of -/+ 50), which represents the most extreme level since 2012. The likely to be the catalysts for AUDUSD to correct lower are the market increasing pricing for Fed tightening or a correction lower in risky asset prices which have started to look rich according to our measures which are indicating that the compensation for investors taking risk is very low.”
“Speaking on Friday, RBA Governor Lowe said he thinks commodity prices are going to “come back off again” and that he did not expect iron ore to stay around 90 dollars. We also remain short NZDJPY targeting 78.60.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.