Morgan Stanley fancies selling AUSUSD. Do you want to know where?
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In their weekly FX round up Morgan Stanley fancy an aussie short I'm not going to tell you where they want in though.
Oh, alright then, as it's Friday.
0.7650 is the magic number they see for shorts
"We look to sell AUD on rallies, particularly if AUDUSD nears the high 0.70s. On the technicals side, AUD long positioning is near the highs of the last three years and sentiment has rarely been more bullish. This alone means AUD is susceptible to a reversal. We also believe some cracks are beginning to show in the data and in the RBA's hawkish tone.
Furthermore, domestic demand has mainly been supported by the housing boom which we expect to reverse. With the RBA's inclusion of negative language on AUD in the most recent statement, we believe too strong an AUD rally from here increases risks of an RBA cut in the near term and we expect weaker data in the future. These both would support the trade."
They want in at 0.7650 with a stop at 0.7850 and a target of 0.7000.