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23 May 2014
AUD threatens to break lower - RBS
FXStreet (Bali) - Greg Gibbs, FX Strategist at RBS, maintains a bias to re-set shorts in AUD/USD.
Key Quotes
"AUD is currently in the process of testing supports just above .9200. A break below this level would be a sign that it has broken the uptrend since January."
"Price action in the last 24-hours is not encouraging since it failed to hold to gains made after the stronger than expected Chinese PMI data. We are still waiting to see if it can hold here, but have a bias to re-set shorts."
"The China PMI data is not sufficient to allay our fears of a slowdown in the Chinese property sector. In particular we are very concerned by the big run up in iron ore inventory at Chinese ports, combined with downside trends in steel prices and downside risks to steel demand and the same time as supply from Australia has grown strongly in the last year and is still expanding. The Chinese equity market has also failed to lift recently, despite stronger equities in Asia and plenty of talk that the government is easing monetary conditions and encouraging fixed asset investment projects."
"Domestic Australian economic confidence has also taken a set-back since the budget. While in numbers terms the budget should not be a big deal for growth this year, it has become a big deal for sentiment."
Key Quotes
"AUD is currently in the process of testing supports just above .9200. A break below this level would be a sign that it has broken the uptrend since January."
"Price action in the last 24-hours is not encouraging since it failed to hold to gains made after the stronger than expected Chinese PMI data. We are still waiting to see if it can hold here, but have a bias to re-set shorts."
"The China PMI data is not sufficient to allay our fears of a slowdown in the Chinese property sector. In particular we are very concerned by the big run up in iron ore inventory at Chinese ports, combined with downside trends in steel prices and downside risks to steel demand and the same time as supply from Australia has grown strongly in the last year and is still expanding. The Chinese equity market has also failed to lift recently, despite stronger equities in Asia and plenty of talk that the government is easing monetary conditions and encouraging fixed asset investment projects."
"Domestic Australian economic confidence has also taken a set-back since the budget. While in numbers terms the budget should not be a big deal for growth this year, it has become a big deal for sentiment."