Today Eamonn brought us a story from the Commonwealth Bank of Australia warning of AUD/USD falling below 0.7600.
On the other side we have National Australia Bank looking at what will take us to 0.8000
They say that AUD is reasonably priced at these levels, both against the dollar and broader trade weighted terms and it will take lower commodity prices and a narrowing of rate differentials with the US to send the aussie below the recent RBA rate cut lows
They don't expect the RBA to cut in March or April and metal prices have been stabilising since mid to late Jan, so any weakness in the currency will have to come from the USD side of the tracks.
Here's how they see the possibility of it rising to 0.8000
""If the EUR/USD rate is able to draw support from positive news on Greece, and/or the USD suffers from any further loss of confidence in a first Fed tightening as soon as mid-year, then AUD/USD is likely to retest the post-Feb rate cut highs near 0.7875. A break above would have us entertaining thoughts of a revisit to the 80 cents level (last seen in late January),"
They're taking the possibility of a dovish view from the US, which is opposite to CBA's thoughts.
Looking at the longer term charts another test and hold of the low 0.76's would be a potentially strong buy signal. That signal may also be shown if we test and hold somewhere around the 0.7700/20 level
AUD/USD daily chart
The 200 mma could have a big say in the pair as we close out the month this week
AUD/USD monthly chart
There is scope to see a decent retracement of the fall, particularly from late last year but the aussie has to make a decision on the Fed and how much it's going to let those rate differentials affect it. A resurgent US helping global growth is going to play into the hands of commodity countries like Australia.
The NAB commentary is from our good friends at Efx and you can have a look at their wares here
