NAB Research discusses AUD/USD outlook and notes that the pair continues to find the air thin above 0.78. NAB thinks that while seasonally, May can be a tricky month for the AUD/USD, fundamentally the pair is starting to look undervalued.
"Our outlook for the AUD/USD, that sees the pair climbing above 80c around mid-2021 and then moving into a higher 80-85 cents trading range in H2 2021/H1 2022, has been predicated on our expectations of commodity prices remaining relatively firm against a softer USD backdrop," NAB notes.
"Our analysis suggests that China’s orchestrated slowdown towards a more sustainable growth rate of around 6% is not necessarily a risk to this outlook. A more drastic decline in China’s credit impulse is a risk that needs monitoring, although history shows that it is possible for other economies to pick up China’s activity slack," NAB adds.