Soaring commodity prices while specs sit net short A$ suggests ongoing gains. Next target for the AUD/USD pair is the 100-day moving average (DMA) at 0.7416 and at a stretch, the 3 September high at 0.7478, economists at Westpac report.

The aussie is finding plenty of support from renewed commodity price squeeze

“This is probably not the scenario traders were counting on in September when China’s stressed property market was in close focus and on CME, leveraged funds and asset managers built a net short A$ position larger than in March 2020.” 

“The overhang of short positions seems to be helping the aussie grind higher against a solid US dollar, with the next targets the 100-DMA at 0.7416 and at a stretch, the 3 Sep high at 0.7478.” 

“Domestically, NSW and VIC vaccination rates are rising quickly, with Australia firmly on track for one of the world’s highest vaccination rates.”

“The RBA will remain dovish for now but AUD should remain bid on most crosses in the week ahead given commodity price support.”