An under-priced RBA rate cut and strong US labor market report should push AUDUSD lower this week. In addition, our technical strategists are bearish AUDUSD. Last Wednesday’s topping candle has capped recent corrective gains and was confirmed by subsequent selling into the end of last week. Seasonal studies highlight May as being the most negative for AUDUSD versus its major currency peers and the most bearish month of the year for AUDUSD as measured by median and mean returns. This adds to our conviction for a move lower towards initial targets in the 0.7680 area. A move below the 0.7530 range lows would signal further downside towards our greater targets near 0.7100.
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