AUD: bullish forecasts from Société Générale
What happened?
Société Générale predicts that the Austrian dollar will rally up in 2021 due to the Australian fast recovery. Indeed, we cannot but agree that the global economy should steadily grow in the next year as vaccinations will start. As a result, the market sentiment will improve, and investors will stream their capitals into riskier assets like the AUD.
Australian growth supports AUD
Unlike the USA and European countries, Asia-Pacific countries have almost taken the virus under control. That’s why Société Générale anticipates that Australia’s GDP will return to its pre-pandemic GDP level by the second half of 2021. In comparison, other developed countries are expected to regain all current losses by the end of 2021 and 2022.
China’s fast rebound boosts AUD
The CNH and the AUD are positively correlated due to the close trade relations between countries. Although the China-Australian relationship worsened amid the coronavirus, it should improve during the next year as it’s beneficial for both sides. Elsewhere, Biden’s presidency implies a more rational approach to the US-China trade deal. That’s why global trade is now expected to boost in 2021.
Technical tips
AUD/USD has bounced off the resistance of 0.7580. If it drops below the intraday low of 0.7545, the way down to yesterday’s low of 0.7520 will be clear. Since the pair is moving in an uptrend, we can assume that after a short decline, it will reverse and rally up. The breakout of the resistance level of 0.7580 will drive the pair to the key psychological mark of 0.7600.
