AUD/USD tested below 2021 YTD lows at 0.7063 on Tuesday, before rebounding back above 0.71. Economists at Credit Suisse turn bearish on the aussie and now target 0.7000 in AUD/USD.

The path of least resistance in AUD/USD remains further to the downside

“With Fed policy expectations in the driver’s seat, a fairly empty data calendar and uncertainty on the covid outlook likely to persist in the near-term, we think the path of least resistance in AUD/USD will likely remain further to the downside.”

“We now see the November 2020 lows just below 0.7000 as the next target for the pair: given the highly uncertain nature of the covid question that markets are currently facing, we would be inclined to view a break below 0.70 as a reason to extend our target even lower as opposed to a reason to go long.”