Forex: AUD/USD found support at 1.0280; back to 1.0300

Right until the recent crisis, it appears that investors were on a structural level over-optimistic ('irrational exuberance' springs to mind). Central bank puts (pre-crisis) and imbalances could not defy gravity and everything came to head in 2008. Ever since, the market has probably learned to keep expectations to the bare minimum, and count on the economy to consistently outperform. This way, the process reinforces itself and a positive cycle develops as activity levels rise higher than expectations. According to Research Analyst Gareth Berry at UBS, “For some reason, the process is working in the opposite way in the UK. Data consistently disappoints, which leads to weaker expectations - and crucially - even weaker activity. The asymmetry suggests some element of 'loss aversion' in play: economic agents are unwilling to invest because expectations are weak, rather than take the risk to capture potentially outsized gains (via first-mover advantage).”