AUD/USD: Broader less US-centric optimism over the global recovery is emerging, likely favoring the aussie – MUFG

Analysts at MUFG Bank, still see a trade idea in going long the AUD/USD pair with a target at 0.7895 with stop loss at 0.7460. the purpose of the worldwide optimism should lift the Australian dollar to fresh cycle highs.

Key Quotes:
“The better vaccination outlook in Europe and positive growth prospects in China should leave a slow grind higher for AUD/USD. Bloomberg’s commodity price level has risen sharply over this motto its highest level since mid-2018, and global equity markets to fresh record highs. the mixture of Australia’s improving terms of trade and risk-seeking behaviour remains favourable for the AUD.”

“The recent domestic data be due Australia has begun to disappoint expectations suggesting tentatively that the recovery is beginning to lose some upward momentum. Most notably, underlying inflation fell to a replacement record low. it’s reinforced expectations that the RBA will extend QE further beyond September, although it’ll likely be time for a policy announcement at next week’s meeting. It poses some modest downside risk for the AUD and in any case, any correction lower would likely be modest given the building optimism globally and therefore the positive terms of trade developments lately .”

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