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AUD: AUDUSD Resistance Key for Momentum in the Crosses

AUD
  • The Aussie received a small boost from a stronger-than-expected retail sales report overnight, and AUDUSD remains well underpinned by the latest bout of greenback weakness and hawkish expectations for the RBA. Spot has narrowed the gap to key resistance at 0.6714, the May 16 high, an area that could come under threat given the AU/US two-year yield differential is currently close to January levels when AUDUSD was trading above 0.68. A breach of this level may be required to build momentum for AUD crosses. 
  • As has been noted, AUDJPY has now broken above the cluster of 2007 highs around 107.85. While a very significant chart level and looking primed for further gains, verbal and actual intervention risks may limit the tradability for this cross in the short-term. The 1991 highs at 109.54 represent the next resistance.
  • Switzerland CPI will be of keen interest on Thursday, and it is worth noting that AUDCHF looks set to extend its winning streak to 12 sessions, recovering nearly 3% from the June lows. The renewed pressure on funding currencies looks to be the key driver here, and markets will focus on downtrend resistance at 0.6056 ahead of the 2024 highs at 0.6100.
  • AUDNZD also trades with a supportive tone and is closing back in on the 1.10 handle. The cross has struggled to maintain momentum above this mark over the past 12 months. Closes above 1.1031 and 1.1056 will be crucial for the cross going forward.
  • After breaking below the January lows, EURAUD has failed to close back above this level around 1.6130. Further single currency weakness ahead of the French run-off vote could signal scope for a move back towards 1.60 and key medium-term support at 1.5850.
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