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Forex Flash: AUD/USD strategy profile – Westpac

FXstreet.com (Barcelona) - The local calendar offers limited distraction from the global USD mood. The RBA May meeting minutes (Tue) should provide little new given the SoMP released in the meantime. May Westpac-MI consumer sentiment (Wed) will provide the public reaction to both the rate cut and the federal budget, which was widely seen as lacking in “goodies” despite the Sep election.

According to Sean Callow, a Global FX Strategist at Westpac, “Unless US data prints firmly on the weak side in coming days, AUD/USD seems likely to suffer a little more punishment before stabilizing. Now that 0.9850 has given way, there are only round figure support levels towards 0.9720/30. However, the June 2012 lows around 0.9600 shouldn’t be challenged. “

Our baseline view on US data (still mostly sluggish) and Fed policy (QE maintained at current pace through 2013) implies AUD/USD will enjoy a bounce back to 1.0000. “The timing is wide open to debate but if Bernanke‘s testimony proves important then AUD/USD could be in for a lively week, trading something of a V pattern.” Callow adds.

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