Australia & UK Strike FTA

A stronger day for the greenback pressured AUD/USD down to lows of 0.7674, the lowest since June 4. The rate last changing hands at 0.7688, flat on the session. There is no domestic data on the docket today, the pair is likely move as a function of the greenback. CBA remains optimistic on AUD: "In our view, either event could be the catalyst to push the AUD higher and more in line with its strong fundamentals. AUD/USD fair value has continued to lift over 2021, largely because of elevated commodity prices. We currently estimate AUD fair value is near 0.85."

• Elsewhere, as previously mentioned leaders from the UK and Australia announced they had struck a free trade agreement. This is the first brand new deal the UK has struck with a developed country/major ally; Australia is the UK's 20^th biggest trading partner and constitutes 1.2% of Britain's total trade. On a separate trade matter, government forecaster Abares has predicted Australian farm exports will rise by 6% in the current fiscal year, the first expansion since 2017/18
• From a technical perspective AUD/USD continues to trade in a range. The pair did break through 0.7675 on Jun 3 but immediately reversed the sharp move lower. The move lower though does highlight a bearish risk. A resumption of weakness would open 0.7586, Apr 13 low and 0.7532, Apr 1 low and a key support. Initial resistance is at 0.7773, Jun 2 high and 0.7813, May 18 high. A move above the latter would ease bearish pressure.