Aud/usd Is Oversold

Quotes from Credit Agricole CIB:

-AUD/USD has faced a significant bout of pressure since testing a high of around 0.9087. A dismal jobs report in December piled on more pressure on the currency and since then it has failed to recover. Consequently short speculative positioning has increased as sentiment has deteriorated. Yesterday’s slate of Chinese data failed to dent the AUD however, with the currency encouragingly showing some resilience. Attention will now turn to tomorrow’s CPI inflation data.

-Yesterday’s release of the TD Securities inflation gauge which printed higher than consensus, highlights upside risks to the release of Q4 CPI and in this respect we believe market expectations of any RBA policy rate cuts look overdone. Our quantitative model estimate for AUD/USD suggests that the currency is oversold, with short term fair value seen at around 0.9226. The material has been provided by InstaForex Company – www.instaforex.com

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