AUD/USD finally nudged through April highs in the 0.946 region and extended its gains to a touch above 0.950. This saw the pair trade at its highest since November last year. Heading into this morning’s trade balance numbers, it seemed the pair was poised to extend its gains, with 0.950 remaining within striking distance.
The trade balance numbers came in at a much worse-than-expected 1.91 billion deficit, with exports dropping around 5% from the previous month. This disappointing trade balance reading saw a sharp pullback in AUD/USD with the pair dropping back to around 0.945. Perhaps the April highs will offer some temporary support in the near term, but this level does not look significant enough to attract buyers.
However, I’m keeping a close eye on the uptrend which has been in place since February and currently comes in around 0.940. We are more likely to see buyers look to come in at this level. On the calendar today we still have RBA Assistant Gov Debelle speaking later tonight. Glenn Stevens speaks tomorrow, while we also get building approvals and retail sales data. On the USD side of the equation, today brings ADP non-farm payrolls along with Janet Yellen comments.