ANZ Research discusses AUD outlook and likes short GBP/AUD exposure in spot targeting a move towards 1.85.
"There appears to be some evidence that the anti-AUD sentiment might have started to reverse in the near term. The post-Jackson Hole environment also looks less USD positive which should help. The question then, is how best to express further tactical upside in the AUD," ANZ notes.
"Putting it all together, our favoured expression of tactical upside is AUD/GBP given: 1. The downward move has been very aggressive and likely slightly over done. Positive momentum from the UK re-opening is likely to dissipate. 2. For Australia, the anti-AUD narratives surrounding the RBA and China are well understood and likely in the price. 3. The recent bounce, if consolidated, should provide a good layer of technical support around 0.53. A tight stop loss below the recent low, 0.5240 would provide good protection," ANZ adds.