The Australian dollar seems to move according to the ebb and flow of the US dollar more than anything else. The team at Danske refocuses on the RBA and sets targets. Will the pair break below support?

Here is their view, courtesy of eFXnews:

Danske Bank Research notes that AUD/USD has reversed the move after the US elections which pushed the pair as low as below 0.72 around year-end.

In that regard, Danske recognizes the support for AUD from improved global economic conditions and rising commodity prices, but still thinks that the RBA wants to limit the upside in AUD and is ready to soften its tone in case the exchange rate appreciates excessively.

In addition, Danske sees relative monetary policies supporting USD versus AUD this year.

Danske targets AUD/USD at 0.75 in 1-month and at 0.73 in 3-month.

AUD/USD is trading circa 0.7630 as of writing.