General bearish sentiment still rules in the AUD interbank market but dealers do not expect to see a massive sell-off even if the CPI comes in below expectations. ACBs and Eastern European Sovereigns have been noted buying dips in AUD/USD and this will slow down any aggressive sell-offs. Dealers expect to see plenty of intraday volatility over the next few days, broadly between 1.02/1.04, but major moves are considered unlikely.
I tend to disagree with them in that I think bearish momentum is soon to start picking up again and whereas the previous medium-term range was broadly 1.0250/1.0850, I think the new range will be more like .9850/1.0450.
