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4 Mar 2015
AUD/USD to eventually target 0.7450/0.72 - JPMorgan
FXStreet (Bali) - According to JP Morgan FX Strategist Niall O'Connor, the reversal in commodity currencies from critical levels suggests the retracements from the February lows have just about run their course, expecting AUD/USD to eventually target new lows at .7450/.7200.
Key Quotes
"In line with the improved setup for the USD, the reversal in commodity currencies from critical levels suggests the retracements from the February lows have just about run their course."
"A key focus is on the antipodeans as both AUD/USD and NZD/USD effectively held important resistance levels over the past week. In line with the overall downside risks, it is important to note that the retracements from the February lows maintain a clear corrective bias particularly given the anemic bounce for AUD/USD."
"As important, the oversold and diverging momentum setup seen at the recent lows has been fully unwound to the point where the current setup is at a multi-month overbought extreme."
"In our daily updates, we have been highlighting the importance of these levels in gauging the extent of any additional retracement. For AUD/USD, the .7930/.8035 resistance zone remains the critical test as it represents the downtrendline from the September high, as well as the former range lows and breakdown zone from January."
"Given this confluence of levels, this area should continue to act as a short term cap. Note that a violation of nearby support at the .7738/22 levels should allow for additional weakness and a retest of the .7626 low. In line with the medium term bearish setup, we expect eventual new lows to target the .7450/.7200 zone (76.4% retrace)."
Key Quotes
"In line with the improved setup for the USD, the reversal in commodity currencies from critical levels suggests the retracements from the February lows have just about run their course."
"A key focus is on the antipodeans as both AUD/USD and NZD/USD effectively held important resistance levels over the past week. In line with the overall downside risks, it is important to note that the retracements from the February lows maintain a clear corrective bias particularly given the anemic bounce for AUD/USD."
"As important, the oversold and diverging momentum setup seen at the recent lows has been fully unwound to the point where the current setup is at a multi-month overbought extreme."
"In our daily updates, we have been highlighting the importance of these levels in gauging the extent of any additional retracement. For AUD/USD, the .7930/.8035 resistance zone remains the critical test as it represents the downtrendline from the September high, as well as the former range lows and breakdown zone from January."
"Given this confluence of levels, this area should continue to act as a short term cap. Note that a violation of nearby support at the .7738/22 levels should allow for additional weakness and a retest of the .7626 low. In line with the medium term bearish setup, we expect eventual new lows to target the .7450/.7200 zone (76.4% retrace)."