Barclays recommend selling EUR/AUD (spot......>

FOREX: Barclays recommend selling EUR/AUD (spot ref: A$1.5840) targeting

A$1.5675, below year-to-date lows, with a stop-loss at A$1.5930.

- Barclays write "this week's RBA decision is unlikely to provide an explicitly

dovish forward guidance, disappointing market expectations of near-term rate

cuts (the 7 May meeting is priced at -7bp for example), and provide further

support to AUD crosses. We expect the RBA to reiterate its neutral stance and

maintain our view of unchanged policy for the foreseeable future. The Australia

Federal Budget will also be released on Tuesday (19:30 Sydney time) and should

project an imminent return to budget surplus (the first in 12 years). We think

the combination of a China PMI rebound and less dovish RBA will be sufficient to

trigger a rally in the AUD, especially given the extreme short AUD positioning

and long rates. We prefer to use the EUR as the funder of choice and remain

structurally short EUR/USD."