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.

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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.  

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