AUD/USD slightly bid after Australia's MYEFO and lower deficit forecasts

AUD/USD is bid as the session gets going and after the Australia MYEFO and the Government sees 2016/17 deficit at A$36.5bn, this headline budget deficit for this year is thus smaller than what was previously forecasted in May, and the market sees this as a positive as the ratngs agency may leave their score at AAA for Australia. Meanwhile, the trend is still lower on the back of the dollar's strength and the hawkish Fed. 

AUD/USD levels

A break below the May low at 0.7146 opens significant downside risks.

The analysts at Westpac offered AUD/USD in a 1-3 month: 

"We suspect that the US interest rate story was the main driver, and there continues to be lingering suspicions that the Reserve Bank of Australia may have to cut interest rates again next year. However, the move has been large and pushed the Aussie beyond its lower Bollinger Band. (~$0.7325).  A move back to it may provide a better opportunity to position with the trend.  Our next target is the May low near $0.7145.  In the big picture, the advance by the Aussie from March through the middle of November was some kind of correction and now the downtrend has resumed. We look for a return to $0.6830 low from early this year," explained analysts at Brown Brothers Harriman.

For a fundamental insight for 2017, watch: