- AUD has broken new highs this year against USD. However, AUD/USD has been consolidating since its last high in February.
- There are now few catalysts available for AUD to stage another leg higher, and as such I imagine that the current trading range will be shortly tested on the downside.
- AUD is particularly exposed to (especially negative) shifts in economic optimism and sentiment, as reflected in equity and commodity prices.
- Going forward, with AUD trading at close to "fair value", I think the risks with respect to future sentiment shifts are to the downside. I would expect prices below 0.75 will trade shortly.
- A follow-through and/or volatility in broader markets could easily send AUD/USD back to late 2020 levels, circa 0.70 to 0.74.
For further details see:
AUD/USD: The Australian Dollar Will Struggle To Break New Highs