AUD/USD: Near-term exhaustion seems likely – DBS Bank

AUD/USD has rallied as much as 6.8% from its late January lows of 0.6968. In the view of Benjamin Wong, Strategist at DBS Bank, a near-term exhaustion is ahead.

Expecting a near-term exhaustion

“The long-term outlook on AUD remains bright with the price path since fetching a critical multi-year low at 0.5510 deemed robust. The near-term is altogether different.”

“AUD’s price with its terms of trade and its underlying of the S&P GSCI Industrial Metals Index flags a near-term wind of caution.”

“The 50% Fibonacci retracement of the 0.8007-0.6968 range, at 0.7487, is now within reach. Hence selling into strength (on a protracted weakening of its terms of trade and industrial metals index) as we approach the daily Ichimoku chart cloud resistance levels at 0.7499 and 0.7557 needs to be risk managed.”