TD Research likes fading USD/JPY bounces into 110, and sees a scope for AUD/USD to test and break 0.72.
"Risk sentiment added some pep to its step following a string of positive newsflow, reflecting the goldilocks mixture of a strong US NFP report and a dovish Fed. The data offered market sentiment a lifeline following capitulation in equity markets. Powell aided this backdrop, noting that the Fed could be "patient" in regards to the pace of rate hikes, TD notes.
"The USD is lower across the board, as these drivers offer a bit for each of the major currencies. Lower real rates support EMFX but also reinforce the top in USDJPY, which we like fading on rallies towards 110.
Friday, we noted the antipodes were the cheapest currencies in the G10 and still think AUD has room to test and break 0.72," TD adds.