AUD/USD: Mild positive bias - Westpac

According to Sean Callow, analyst at Westpac, AUD/USD pair has been rattled this week by the RBA’s possible policy hint in this week’s statement, but suggests that the weight on the Aussie from this angle is actually a little lighter over the week, with OIS yields slightly higher.

Key Quotes

“Lending support are global factors such as cascading signals of a US-China trade deal and a rebound in China March PMIs. MSCI World is at highs since Oct 2018.”

“The Feb domestic data round also helped, especially the sharpest rise in retail sales since 2017 and a record high trade surplus.”

“Given all these reasons for AUD/USD to rally, its repeated failures in the mid-0.71s are a concern, probably testament to the focus on when the RBA might cut rates plus political uncertainty.”

“We hold a mild positive bias for the week, enough for the 100dma average of 0.7147 to give way but probably not the 200dma at 0.7202.”