A$ Still Outperforming JPY, AUD/USD Struggling Above 0.7200

The post Asia-close for AUD/USD was fairly range bound. We saw a low just under 0.7180, but topped out above 0.7220. We finished weaker on softer cross asset signals, opening this morning around 0.7190.

• Equity sentiment was weaker in both the US (-1.08%) and EU (-0.47%) markets, but the VIX index hung near recent lows, closing just under 24%.
• US yields were generally firmer, reversing course from the previous session. The 10yr back above 3.00%. EU/UK yields also trended higher.
• Commodities were supportive for the A$, with continued focus on oil. Brent pushed above $123/bbl, while iron ore held in the $145/$146/tonne range, which is close to recent highs. Base metals edged higher.
• The A$ outperformed JPY and CHF, but underperformed EU currencies. AUD/JPY got close to 96.90, before settling back at 96.50/55.
• There is no data out today. Treasury Secretary Kennedy, who sits on the RBA board, stated Australian inflation is likely to breach 6%, and could go well above that level and remain there for the rest of the year.
• From a technical standpoint, the short-term set up is still bullish. Resistant is at 0.7283, the June 3rd high, while 0.7343 remains a Fibonacci retracement target. On the downside, the 20-day EMA at 0.7148 is a support point.