AUD/USD: headed to 0.8124? - Westpac

Analysts at Westpac noted the Aussie's start performance and here is their outlook...

Key Quotes:

"RBA Deputy Governor Debelle speaks Fri, Governor Lowe at the Anika Foundation lunch and Q2 CPI on Wed. 

Bias: The Aussie is now up around 3% over the past 5 days, the best performing G10 currency. The weaker USD has certainly helped, but it’s been a good month for commodity currencies, with NOK and CAD also making large gains. 

For Australia, iron ore prices have been rising, up 32% since the mid-June lows. Even so, we are looking stretched on our fair value model. The commodity rally has certainly been a factor in the rise in fair value recently, but we are now above the top end of our fair value range and one standard deviation above (0.7950). 

AUD/USD is at highs since May 2015 and the TWI since Dec 2014. These are levels which we think are going to start making the RBA more uncomfortable. The speeches over the next week are opportunities for officials to talk the AUD lower or dampen rate hike expectations. 

The psychological 0.80 level should be well defended. The next obvious level is 0.8124. On the downside, 0.7750/80 should be support."