AUD/USD treads water above 0.7600

The Aussie dollar alternates gains with losses vs. its American counterpart, leaving the price action around AUD/USD side-lined above the 0.7600 yardstick on Good Friday.

AUD/USD rebounds from YTD lows near 0.7530

AUD/USD extends the side-lined theme above the 0.7600 level against the backdrop of the more generalized rangebound mood prevailing in the global markets on Good Friday trading.

AUD managed to reverse Thursday’s pullback to fresh yearly lows in the 0.7530 zone and closed the session slightly on the positive territory.

Less auspicious results from the Australian docket appear to have weighed on the currency earlier in the week following the small drop in the manufacturing PMI in March (from 56.9 to 56.8), shrinking trade surplus in February, a monthly contraction in Home Loans and the 0.3% drop in Retail Sales from a month earlier, also in February.

Moving forward, the release of March’s US Nonfarm Payrolls later in the NA session is expected to bring in potential bouts of volatility in spot amidst the prevailing marginal trading conditions, as most markets are closed on Good Friday.

WHAT TO LOOK FOR AROUND AUD

The aussie dollar gathered some buying interest following 2021 lows near 0.7500 on Wednesday. In the meantime, price action around AUD remains dominated by dollar dynamics plus the performance of commodity prices, particularly iron ore. However, the dovish stance from the RBA is expected to keep gains in the currency somewhat capped helped by occasional corrections in the commodity space. It is worth recalling that the central bank is expected to keep interest rates at current levels until at least 2024, while it forecast inflation to remain subdued for the time being.

Key events in Australia next week: RBA interest rate decision (Tuesday) – Building Approvals, RBA’s Financial Stability Review (Friday).

Eminent issues on the back boiler: China-Australia trade/political effervescence - Is a bubble shaping up in the Australian housing market? – Economic recovery amidst the vaccine rollout – Sustainability of the rally in iron ore – RBA remains vigilant on unwelcomed AUD appreciation.

AUD/USD levels to watch

At the moment the pair is retreating 0.07% at 0.7610 and faces the next support at 0.7531 (2021 low Apr.1) seconded by 0.7383 (200-day SMA) and then 0.7000 (round level). On the upside, a break above 0.7664 (weekly high Mar.30) would expose 0.7717 (50-day SMA) and finally 0.7849 (monthly high Mar.18).