Australian Dollar Outlook: Could we See Tactical Buying of AUD Towards 0.92?

The Australian Dollar (Currency:AUD) is currently enjoying a relief rally affording those with AUD transfer requirements a brief respite:

The Pound to Australian Dollar exchange rate is 0.65 pct up on last night's close; GBP-AUD is at 1.7208.
The Euro to Australian Dollar exchange rate is 0.89 pct 1.4566.
The Australian dollar to US Dollar exchange rate is 0.75 pct higher at 0.9043.

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Outlook for Australian Dollar Improves in the Short-Term

Ipek Ozkardeskaya at Swissquote says today's relief rally has the potential to extend a little further towards resistance levels:

"As widely expected, the RBA kept the policy rate unchanged at the historical low of 2.50%. The status quo was already broadly priced in, however the absence of the “scope for further easing” triggered a decent AUD-rally.

"AUDUSD hiked to 0.9048; the MACD 12, 26 day indicator sharply flattened. For a close above 0.9040, the momentum indicator will turn bullish. On the topside, the key technical resistance is placed at 0.9103/05 (Fibonacci 38.2% retracement on Aug 19th – Aug 30th drop & 50-dayMA), while stops are building above.

"While the intra-day sentiment is clearly positive, the risk of a short squeeze should be kept in mind. AUD and NZD have been the most hit G10 currencies vs. USD on the geopolitical jitters in Syria and the risks are only back-loaded to the next US Congress meeting (on Sept 9th).

UniCredit Bank are also forecasting gains for the Aus Dollar:

As expected, the RBA maintained the OCR steady at 2.50%, again suggesting to a “wait and see” mode for now. In any case, AUD-USD breaking above 0.90 might trigger some tactical buying towards 0.92.

Shaun Osborne says the outlook for the Australian dollar has improved from a short-term perspective:

"With the overnight statement that was very similar to last month, the AUD has been boosted.  AUD/USD has run into some resistance at 0.9045/50, and the next key area above is 0.9160/9200.

Don't forget the longer-term picture

It is however worth considering the various timeframes involved here.

While the near-term outlook favours a relief rally in the Australian Dollar, the longer term outlook is decidedly more negative.

Luc Luyet at MIG Bank says:

"In the longer-term, the break of the strong support at 0.9388 (04/10/2011 low) opens the way for a further medium-term decline, whose potential downside risk lies near the key support at 0.8067 (28/05/2010 low). However, we keep in mind that if the key resistance at 0.9345 were to be broken, we would have to reassess our outlook."