Forex Flash: AUD/USD to range lower between 1.00/1.04 - RBS

FXstreet.com (Barcelona) - With falling commodity prices and a RBA rate cut for June already priced in at 92% odds, RBS FX Trading Strategist Greg Gibbs says, “AUD is likely to at least test out the low end of its range again,” set at the 1.02 level, which today has nearly done so by printing fresh weekly lows at 1.0240 following worse than expected Building approvals in Australia, and soft final HSBC manufacturing PMI in China.

“It seems unlikely that the AUD will collapse,” Greg expands, “but it seems likely that it will break out of its tight range since mid-Sep and test out lower levels. The AUD failed to rise above 1.04 in recent trading,” he noted.

“My guess is that the recent range of factors is negative enough to push the AUD into a new lower range between 1.00/1.04,” the analyst suggests, adding: “These include weaker Chinese data, weaker industrial metal prices, weaker global resource equities, a fall-back in recent recovery indicators in Australia in the last month, a softer inflation outcome and renewed rate cut expectations,” he concludes.