AUD Moves Off Recent Highs

The A$ spent most of the post-Asia close on Friday tracking lower, from around 0.7260 back to the low 0.7200 region. We generally underperformed the rest of the G10, and AUD/USD is back below key MAs. We are just above 0.7200 in early trade today.

• Yield spreads moved off recent highs, moving against the AUD. The broadly positive US non-farm payrolls report help USD sentiment recover.
• Equities were lower in US and EU trading, while the VIX index edged slightly higher, but still closed sub 25%. This likely helped limit the downside in AUD/JPY, which held around recent highs close to 94.40/50.
• Commodities were mixed, iron ore continued to recover to $145/tonne, and could be buoyed by reports of Beijing easing Covid restrictions further. Oil was also on the front foot, Brent pushing back towards $120/bbl. Copper came off recent highs, down 1.8% on Friday, following the 5.2% gain on Thursday.
• The data focus today is Melbourne Institute inflation expectations and ANZ job ads. The main focus this week though will be the RBA meeting tomorrow. The Bloomberg consensus is now for a 40bps hike.
• From a technical standpoint, support is seen at 0.7126 (the 20-Day EMA). Resistance is at 0.7283 (the June 3 high). 0.7343 is the 61.8% retracement of the Apr 5 - May 12 bear leg.