The Australian dollar managed to recover thanks to a strong jobs report in the land down under.
However, the team at BNP Paribas sees two reason to fade rallies in AUD:
Here is their view, courtesy of eFXnews:
Although Australia’s October jobs report surprised substantially to the upside, with a 58.6k rise in employment pushing the unemployment rate down to 5.9%, BNP Paribas advises cautious of chasing further gains in the AUD for two reasons.
“Firstly, Australian jobs data tends to be very volatile.
Secondly, BNP Paribas positioning analysis signals the market did not go into the data release holding a sizeable AUD short position, †BNPP clarifies.
“The AUD bill futures curve is now very flat and we see scope for a rebuilding of easing expectations if commodity prices continue to weaken,†BNPP argues.
BNPP remains positioned via options for AUDUSD downside.
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