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"The exchange rate is dampening down imported inflation. There's now a chance of an interest rate cut before mid-year."
- Citigroup Inc. (based on Bloomberg)
Pair's Outlook
Pair picked up pace and has peaked above 1.03 today. However it did not manage to breach 1.0340 and at the moment is hovering some 30 pips below this mark. Looking at the reading of technical indicators and market sentiment it becomes rather evident that this most likely is just a bullish correction after significant drop, but overall trend should remain bearish in the short and medium term.
Traders' Sentiment
Bears continue to hold overwhelming majority in the market as only one out of four outstanding positions are long on the pair. Bulls, however, might swing the market for their benefit as 62% of pending orders on the pair are to buy the aussie against the greenback.
© Dukascopy Bank SA