AUD/USD: Three reasons why it is too early to give up on 0.7100-0.7450 target range – Credit Suisse

With the AUD/USD pair now back below the top end of the 0.7100-0.7450 target range, strategists at Credit Suisse do not see a strong reason for changing their view on the aussie, for the following reasons.

See – AUD/USD: Failure at the 0.7472 downtrend allows for a dive as low as 0.7106 – Commerzbank 

The RBA is likely on the backburner until Dec 2021, at least

“Markets are now likely to focus on the Jan 2022 meeting as the likely next important date for RBA policy. A strong upside surprise in the Q3 wage price index data on 16 Nov might dictate increased market interest in the Dec meeting, but focusing on that seems premature for now. In the meanwhile, policy expectations have already moved quite a bit in favour of AUD over the past month.”

Vaccinations levels are still too low to give the all clear

“The current level of vaccinations (38.7% of adults fully vaccinated) might still be too low for markets to comfortably take the view that the peak in hospitalizations and the end of lockdowns are around the corner.”

Rebound in iron ore has been short-lived

“The uncomfortable message about the state of Asian demand is worth taking into consideration, especially at a time when ongoing pledges from monetary authorities might be keeping sentiment somewhat vulnerable to the possibility of a sudden mark-to-market against economic reality.”