AUDUSD: A neutral stance is required
|Early losses saw Asia take the Aud down to 0.7422 on Friday, although these were later reversed through Europe/US trade, and a squeeze to 0.7460 was seen ahead of a close at 0.7445.
The momentum indicators are mixed at the start of the week, and in the absence of the UK/US a quiet session would seem to lie ahead. The daily charts still look mildly constructive, and above Friday’s high we might expect a run back towards minor resistance at 0.7480 and at 0.7500 ahead of the 23 May high of 0.7517. Above here would then look for a run towards 0.7540/45 and eventually to 0.7555 although that remains remote.
On the downside, support will be seen at Friday’s low of 0.7422 ahead of 0.7400/10 and the recent lows at 0.7384/88. Below this would open the way to the 12 May low of 0.7366 and 0.7350 (minor), ahead of the stronger 0.7330 level. Back below the 9 May low of 0.7328 would find little to hold the Aud up until 0.7300 and the rising trend support, at 0.7285, although this seems unlikely to be seen for a while.
A neutral stance is required, although the dailies do seem to hint at slightly higher levels, but the prospect of a soft (even negative) GDP reading on Wednesday may well limit any positive momentum.
Economic data highlights will include:
M: Company Gross Operating Profits (Q1)
T: Building Permits (Apr)
W: Private Sector Credit, (Apr), GDP (Q1), China Mfg/Non Mfg PMI (May)
T: AIG Mfg Index (May), Retail Sales (Apr), US Personal Consumption/Expenditure (Q1), Caixin China Flash Services PMI (May)
F: New Home Sales
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