AUD/USD: Momentum appears to be shifting to the downside - TDS
04.05.2021, 14:42

AUD/USD: Momentum appears to be shifting to the downside - TDS

FXStreet notes that the RBA's hawkish pivot was unable to provide the currency with a sustained lift. Together with a deteriorating technical backdrop and an inability to benefit from cross-asset support, economists at TD Securities think momentum is now shifting more clearly to the downside in the near term.

“The Reserve Bank of Australia kept all of its policy settings unchanged at its May meeting, as widely expected. That said, the RBA still managed to surprise us. Policymakers upgraded all key forecasts more than we anticipated and stated the decision on the Yield Curve Control (YCC) Target bond and QE will be made at the policy meeting scheduled for 6 July. We were looking for this to come in August."

“We think it is notable that AUD/USD is underperforming most of its G10 and EM counterparts despite the upside surprise from the RBA overnight. We think this weakness could suggest that market sentiment is turning more bearish toward the pair.”

“We note that the daily MACD is also very close to a downside crossover event. The pullback has taken the pair lower to test the 100-DMA (0.7707), which also corresponds closely with a cluster of other attractors around the 0.77 mark. We think a daily close below that pivot will draw out additional selling pressure in the days ahead.”

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