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Thomson Reuters
May 30 - 02:36 PM
AUD/USD - COMMENT-AUD/USD Bears Frustrated As Downside Risks Are Ineffective
First appeared on eFXplus on May 30 - 12:25 PM

AUD/USD is trading heavy but hardly lower on the day, which may lead bears to grow frustrated as downside risks fail to spur price action.
Another round of dismal economic data from Australia nS9N21K009 nAZN02EY00 enhanced views economic growth is stumbling while U.S.-Sino trade tensions remain on the front burner nL4N2360M2.
The combination of disappointing data and trade tensions have increased chances of an RBA cut on June 4 and additional easing thereafter RBAWATCH.
Despite those downside risks AUD/USD is unable to trade to new 4-month lows and it maintains a foothold above 0.6900.
A sharp pullback in Australian government bond yields also failed to push AUD/USD significantly lower.
Investors have likely priced in much of the expected RBA cuts and downside risks nL4N2360WS. A new bearish catalyst is needed to send the pair markedly lower -- such as a sharp dovish shift from the RBA next week.
Positioning and options continue bears' frustration.
Net-short aussie positions remain elevated and covering of those positions could be underpinning AUD/USD.
Options show that big strikes and reduced premiums for aussie puts help deter bears . It appears the 0.6850-0.7075 range will hold without a new reason to sell.

chart: Click here

Thomson Reuters IFR Markets


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