AUDUSD: Being short is still preferred

The Aud has had a choppy session by using 0.7400 as a pivot but is finishing towards the lower end of the 0.7425/0.7377 range, partly due to the firmer US$ and partly because copper and iron-ore continue to weigh on the pair. The underperforming Building Permits early yesterday also added to the downside momentum.

Technically, the short term momentum indicators look a little more mixed, with the 4 hour charts still suggesting that we may need another test of the topside, possibly hinting at further choppy consolidation. If 0.7400 can be regained we may then get another test of the 0.7425 session high. Beyond there, although unlikely, would allow a move back towards 0.7440, 0.7460 and 0.7485.

On the other hand, the dailies are pointing increasingly lower, suggesting any short term strength should be sold into. Back below the session low of 0.7377 would find good bids nearby at the Friday low of 0.7367, but a break of this would seem to have little to hold the Aud up until 0.7300 and the rising trend support, at 0.7285.  Being short is still preferred, looking for another squeeze above 0.7400 to sell into. It may get volatile today, with the Retail Sales and the NAB Business Conditions/Confidence due. We then get the Budget tonight although that generally has little effect on the currency.

Economic data highlights will include:

Retail Sales, NAB Business Conditions/Confidence, Australian Budget