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Antipodeans Resume Decline, AUDUSD Approaches Dec 2020 Low

FOREX
  • AUD (-0.7%) and NZD (0.57%) led weakness in G10 on Tuesday as the greenback regained some poise. An MNI event with Richmond Fed's Barkin was a highlight, at which the FOMC voter highlighted further progress was needed on the Fed's employment goal.
  • The dollar index crept gradually higher throughout the day, holding onto 0.2% gains despite a partial reversal approaching the WMR fix. As noted yesterday, Citi's prelim month-end model for June indicates slight USD sales with their signal strength under half the historical norm.
  • The Japanese Yen also strengthened leading cross/JPY to extend yesterday's losses. AUDJPY the notable underperformer, currently down 0.78%.
  • Technically, the outlook for AUDUSD remains bearish. Recent price action confirmed a resumption of the reversal that occurred Feb 25 and signals scope for a deeper pullback towards 0.7462 next, the Dec 21, 2020 low.
  • Despite the firm bounce off the lows in crude benchmarks, CAD was pulled lower in tandem with other risk-tied currencies. USDCAD bounced 0.45% and is approaching the June 22nd highs just above the 1.24 handle. Attention remains higher at 1.2501 resistance, a key Fibonacci retracement.
  • Chinese Manufacturing PMI will be released overnight, while Eurozone Flash CPI estimate headlines the European data. During the US session markets will await the ADP Employment figures, Canadian GDP and the MNI Chicago Business Barometer.
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