AUD/USD to win back the 200-DMA at 0.7320 after a brief correction – ING

After staying surprisingly resilient against the dollar last week, the Australian dollar came under selling pressure during the Asian trading hours. Nonetheless, economists at ING expect the aussie to recapture the 200-day moving average (DMA) at 0.7320 soon. 

The correction may not have long legs

“Tonight, a speech by Reserve Bank of Australia Governor Philip Lowe will be in focus, as markets try to gauge whether the recent global developments are prompting a change in the Bank’s patient stance on monetary tightening. This does not seem very likely given the RBA’s explicit focus on wage growth dynamics, but it is also hard to ignore positive external inputs, and above all the sharp rebound in iron ore prices.”

“We expect some relative outperformance of AUD over NZD in the coming days, and AUD/USD might even find its way back above the 0.7320 200-DMA soon.”