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Modi, AMLO Top Major Economy Leader Poll, Macron Last


Under Pressure


Trend Condition Remains Bearish

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AUD/USD has registered fresh multi-month highs over the last 24 hours, and last prints little changed on the day, just above of $0.7520.

  • Some of Australia's key exports (think coal, LNG and some metals) have supported the AUD during the month-to-date. Broader USD weakness (as measured by the DXY) has also helped the AUD/USD cross higher in recent days. Hawkish RBA repricing (however accurate/erroneous that may prove to be) has lagged the degree of hawkish Fed repricing, with the AU/U.S. 2-Year yield spread narrowing to the lowest level seen since Mar '20, although, offering some counter, the AU/U.S. 10-Year yield spread has hit multi-month wides in recent days.
  • Our technical analyst notes that AUD/USD maintains a firmer short-term tone. The pair has traded above resistance at the Sep 3 high ($0.7478), a bull trigger. The breach of this hurdle has removed recent bearish considerations and strengthens a bullish case as a positive price sequence of higher highs and higher lows is established. The Jul 13 high ($0.7503) has also been cleared, leaving bullish focus on the Jul 7 & 6 highs ($0.7534 & $0.7599 respectively). Support has been defined at the Oct 18 low ($0.7379).
  • Looking ahead to Thursday's local AUD docket, the Q3 NAB business survey and latest round of scheduled ACGB purchases from the RBA are due. Re: the latter some still point to the potential for the RBA to step in a reinforce its 0.10% ACGB Apr-24 yield target today (the line finished Wednesday's session at 0.1525%), although Tuesday's late move from the RBA (when it hiked borrowing costs for the bonds relevant to enforcing the target) reduces the odds of such a move. Weekly ABS payrolls data will also hit.