AUDUSD Holding Onto Recent Gains

The AUDUSD broke through 0.6700 again last night to reach a high of 0.6724. We are back at 0.6700 now though, weighed by late US equity market weakness. Still, AUD, along with NZD, were the best performers in the G10 against the USD for Monday’s session.

• AUDUSD could rally further, as it is holding onto recent gains and remains around its 50-day EMA. The intraday high is the initial resistance for the AUDUSD with 0.6768, the 61.8% retracement of the Aug 11 – Oct 13 downleg, the next level to watch after that.
• AUD rallied against JPY overnight and reached a high of 94.29 but is now giving up some of those gains and is around 93.70. AUDNZD is stable around 1.0989. AUDGBP broke higher after trading sideways and reached a high of 0.5727 but has eased now to 0.5701.
• Equity markets were broadly stronger in Europe with the Eurostoxx up 0.5% but the US finished lower by around 0.9%, as Treasury yields rose. Oil prices fell overnight with WTI down 4.2% to $85.20/bbl as optimism on improving demand from China faded. Iron ore is solid at $92-$93/tonne (Nov 22 contract).
• The minutes from the November 1 RBA meeting are published today with any indications of where we are in the tightening cycle likely to be the focus. This is followed by a swathe of data from China.