FOREX: Australian Dollar Continues to Outperform Post RBA Surprise

• Despite the latest bout of dollar strength Thursday on limited newsflow, AUDUSD remains undeterred, holding towards the best levels of the week. The hawkish surprise from the RBA and the ongoing resilience for major equity benchmarks is likely underpinning the relative optimism, keeping AUDUSD’s sights firmly on the cycle highs located at 0.6590.
• Today’s dynamic has allowed the likes of EURAUD and GBPAUD to underperform, with the former reaching a near two-week low back below 1.7900 and testing initial 20-day EMA support at 1.7865. For GBPAUD (shown below), price action extends the 3-day slide to 1.25%, narrowing the gap to short-term trendline support, located around 2.0660. A break below would then target a move to horizontal support just below the 2.05 mark.
• Recall that Westpac have recommended entering GBPAUD shorts on a move to 2.0920, with a stop loss at 2.1050 and target of 2.0500.
• Moderate outperformance against the Kiwi has seen AUDNZD consolidate around the 1.0900 level. We highlighted the cross has extended its recovery to a seven-week high yesterday, with the immediate focus on 1.0922 (May 15 high), before the early April highs just above 1.10.

Source: Bloomberg Finance L.P. / MNI