Pressure building on the AUD

AUD/USD has been in a solid downtrend since May 14 and this has taken the pair down from around $0.8164 to $0.7645 where it is currently trading.

Click to enlarge

There is also a support line that kicks in around the current region. I feel this support will need to be defended vehemently in today’s session given there are some fairly sensitive releases set to hit the wires. Locally today, we have building approvals and company operating profits. The Market is looking for a 1.7% fall in building approvals but I wouldn’t rule out a positive surprise given the impact of lower rates. Company operating profits for Q1 are also due out and the market is expecting a relatively flat reading. China releases its manufacturing PMI and that’s expected to come in at 50.2. No change is expected at the RBA meeting tomorrow but some analysts feel the language might have to be adjusted to prevent the AUD from rallying again, as happened last time. The board might even reconsider reinstating the easing bias at the end of the statement. Through the week we also have Q1 GDP, trade balance and retail sales data.  

Click to enlarge

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.