Currency analysts remain bullish on the AUD/USD exchange rate but wants a retreat to 0.7080-0.7000 before rebuilding long positions.
The Australian Dollar is trading above the level where JPMorgan wants to buy it.
AUD/USD closed near 0.7204 on Friday after reaching 0.7214, leaving the pair roughly 1.7% above the desk’s first preferred entry and 2.8% above the bottom of its buying zone.
JPMorgan is not abandoning its constructive view.
The desk simply considers the current level unattractive for adding exposure.
“We have been bullish on AUD for well-trodden reasons, but with the pair generally struggling at these levels, we have been waiting for a pullback towards 0.7080/00 before topping up on longs.”
The preferred strategy is to rebuild long positions around 0.7080, with 0.7000 representing the deeper end of the zone.
That makes this a pullback call rather than a forecast that AUD/USD must fall permanently.
The distinction matters after the stronger US payroll report.
A firm Dollar response to US data could provide the retreat JPMorgan was waiting for without necessarily invalidating the bank’s broader Australian Dollar view.
Before the release, the desk had already shown reluctance to chase the pair near 0.72.
“NFPs are today, although with Waller drawing attention to next week’s CPI, I am a little less inclined to chase a surprise print today.”
The payroll surprise has shifted attention towards US inflation and the durability of Federal Reserve tightening expectations.
If those expectations strengthen, AUD/USD could be forced back towards JPMorgan’s entry levels.
The 48-hour chart nevertheless shows that the Australian Dollar absorbed the payroll release relatively well.
AUD/USD briefly dropped below 0.7190 but recovered to close around 0.7204, near the upper end of its 0.7159-0.7214 range.
Why JPMorgan still likes the Australian Dollar
The bank’s constructive stance has been supported by Australian rate expectations, resilient demand for commodity currencies and investor flows.
“AUDUSD moved above 0.72 for a second time this week while NZDUSD got a look above 0.59, although both have been trickling lower since London sat down.”
JPMorgan also reported real-money demand for the currency.
“Flow-wise, RM were large buyers of oz and, to a lesser extent, NZD yesterday, whereas systematics were LHS in AUD.”
The risk for prospective buyers is that 0.7080 never trades, leaving the bullish view without an entry.
The opposite risk is that a break below 0.7000 reflects more than a routine Dollar correction.
Between those outcomes, JPMorgan’s message is clear: stay constructive, but make the market come to the preferred price.
Our currency coverage draws on live market data, official economic releases and published bank research.
