AUDUSD - still Bullish?

Last night’s headline was the Australian CPI inflation falling - 0.2% quarterly (vs est. of+0.2%), which caused the AUD crosses to move against their bullish trend.

However this data is unlikely to shatter the dominant theme of rising inflation expectation with oil above $45 and stabilizing commodity prices, which support the Aussie dollar higher. While on one end China has seen improving economic data (positive for AUD), US data continued to show weakness with disappointing US durable goods yesterday. Tonight the Fed will probably want to keep the bearish momentum on the greenback going, at least until inflation really materializes.

The risk to the bullish AUD scenario, is that long AUD positioning is at the highest level since September 2014 according to CFTC data.

AUD/USD Daily – favour LONGS as long as 0.75 holds.

AUDUSD 27.04.2016

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.

Find articles by analysts