ANZ in their weekly look at the forex market. This time their focus is on the Australian dollar.

They title it: AUD, no more value here

In summary:

  • The recent rally in the AUD has pushed it above fundamental fair value. It has also played catch-up to the improvement in global risk appetite.
  • We do not expect that fundamentals can push it any higher and think that global risk appetite now looks extended.
  • The AUD is due for some consolidation and we recommend selling AUD/CNH at 5.3535 and buying a 1 month AUD put spread.

And, more:

MOMENTUM IS LOOKING STRETCHED

  • The AUD has seen a strong rise over the past couple of weeks as a brief reassessment of the RBA's bias (which has since been largely unwound) and an increasingly weak USD both took their toll.
  • We think that this move is increasingly looking overdone. While this fact is easily verified by looking at technical momentum indicators, we have found additional evidence of the lack of sustainability in a number of our proprietary indicators as well.