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AUD/USD bouncing off 0.9620

FXstreet.com (Barcelona) - The sharp decline in the Aussie dollar apparently found some respite in the vicinity of 0.9620, dragged lower by the stronger-than-expected US Consumer Confidence in May.

According to M.Mohi-uddin, Director of FX Strategy at UBS, the Swiss bank has lowered its forecasts for the pair. It now expects AUD/USD to trade around 0.95 in a three months view and at 0.90 within the next twelve months. The expert commented the reasons behind the new estimates: “First, the RBA looks set to cut interest rates further while the Fed may start to taper its asset purchases. Second, lower yields are likely to induce central bank reserve managers and private clients who have built up entrenched positions in the currency to look elsewhere for carry returns. Third, commodity prices are likely to remain under pressure”.

The pair is now losing 0.04% at 0.9628 and a drop beyond 0.9593 (low May 23) would open the door to 0.9581 (low Jun.1 2012). On the upside, resistance levels align at 0.9741 (high May 24) followed by 0.9778 (high May 23) and finally 0.9798 (MA10d).

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