AUD strength is becoming increasingly prominent on several cross rates. While the threat of this was noted in Global Daily FX Volume and Technical Strategy earlier this week, more recently the Barclays systematic TRENDS tool also points to such risks. Further, our volume indicators show relatively larger and increased selling interest for EUR/AUD. Along with this pullback for EUR/AUD, AUD/NZD has also garnered renewed attention as AUD short covering is taking hold. For AUD/USD itself, we view the bounce as temporary given our view of a stronger USD though on the cross rates, the change in trend is potentially more sustainable.
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