Despite the massive fall in commodity prices and the general atmosphere of risk aversion, the AUD is holding up very well. Tomorrow’s budget may have some impact but with the RBA telegraphing another 25 bps rate hike, nobody really wants to sell the AUD. I’m favouring a week of consolidation with a neutral bias and initial range parameters at 1.0575/1.0825.
From a medium term perspective, I think the uptrend has started to show some cracks and levels above 1.10 would be hard to sustain.
