AUD/USD by Morgan Stanley: bearish to continue in oversold way

AUD/USD by Morgan Stanley: bearish to continue in oversold way

8 September 2015, 06:11
Sergey Golubev
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Morgan Stanley stated that AUD is in oversold related to USD but, anyway, they believe for the bearish trend to be continuing:

AUD: Domestic Story Deteriorating. Bearish.
"Despite the sell-off already seen in AUD, we believe there is scope for further weakness. It’s notable that AUD has sold off even as iron ore prices rose recently, suggesting that it is more than simply a reflection of external factors. Indeed, domestic data continue to deteriorate and the market is now pricing in nearly a full cut by the end of the year. Still, with our economists expecting a cut in November, we believe the market will move to our more dovish view, pressuring AUD."

Let's evaluate the situation with AUD/USD concerning future possible direction and the levels.

AUD/USD: bearish. This pair is on primary bearish market condition with breaking 0.7037 key support level from above to below for the next bearish target as S3 YR1 Pivot at 0.6181. If the price breaks 0.7037 key support level on close weekly bar so the bearish trend will be continuing; if not so we may see the ranging market condition up to year-end for example.

Resistance
Support
0.7532
0.7037
0.8293
0.6181

Thus, the pair is on primary bearish and the reversal to the bullish is unlikely in the near future: the reversal resistance level is located to be above 0.8293. So, Morgan Stanley's forecast is correct one: the bearish trend for now, and the bearish trend in the near future up to the year-end for example.

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