BNP Paribas have announced their latest trade of the week with the French bank suggesting that short positions in the AUDUSD could be attractive.
Currency investors should consider selling AUD/USD this week, advises BNP Paribas Research this week.
“We recommend to short AUDUSD because we think the USD could rally this week as markets will refocus on Q2 economic data and the medium term picture.
Our economists think the language on the balance sheet is likely to change at the Fed meeting, setting up a formal balance sheet reduction announcement in September,” BNPP argues.
The view seems to be based more on the US dollar side rather than the Aussie. The AUDUSD enjoyed a strong rise last week with the first three trading days seeing price break out of a falling channel. Whilst price consolidated in the latter part of the week the pair still recorded its highest weekly close since April after moving firmly up through the 0.7515 level – this could now be viewed as the first level of support and would need to be broken below with conviction before any significant declines can occur.
Should price continue higher 0.7610 could offer resistance initially if tested with a move through here paving the way for further gains towards 0.7670 and 0.7750. It’s a fairly big week on the data front for this cross with the biggest event of them all Wednesday’s FOMC meeting.