Robert Rennie, Head of Research at Westpac, says that "AUD / USD is finally underestimated." Rennie argues that, according to Westpac's model for the fair value of currency pairings, AUD / USD can finally be called underestimated.
Is it time to take long positions?
According to Rennie, although the pair is highly underestimated, the moment is not good for purchases of AUD, not USD, but most major currencies. According to him, the price of 0.6900 is quite likely before we see a clear signal that the bulls start to prevail.
What does Wall Street expect for the pair?
On the chart above we can track the expectations of some of the biggest Wall Street players. At a glance, it is clear that the only optimist in terms of AUD/USD remains Bank Of America Merrill Lynch, who expect the pair to finish the year higher than the current levels - 0.7700. Looking at the forecasts of the rest, it is noticed that the level of 0.7400 is emerging as the upper limit among the forecasts where we can look for short positioning. Given the outlook for RBA, I expect the Wall Street forecasts to be realized
Source: Bloomberg Finance L.P.
Charts: Used with permission of Bloomberg Finance L.P.
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