Back Towards Resistance

The greenback faded further Thursday, prompting the DXY index to retreat further below the 200-dma and narrow in on next support at 91.50, this saw AUD/USD gain ground, moving back up towards intraday resistance around 0.7660, the pair topped exactly here. AUD/USD last trades at 0.7647, down around 6 pips on the session.

• AUD was also supported by commodity gains, iron ore is at its highest level since late February while iron ore swaps are back over $170/ton for the first time since early March.
• AiG Performance of Services Index rose to 58.7 in March from 55.8 previously. Looking at the breakdown new orders and employment both saw solid gains, new orders index now at 67.5, wages also saw solid gains to 61.0. Deliveries and sales fell, attributed in part to localized lockdowns in the survey period.
• Yesterday RBA Deputy Gov Debelle, speaking in his capacity as the chair of the Global Foreign Exchange Committee, said liquidity in the FX market has been resilient but didn't comment on AUD specifically.
• On the coronavirus front the Australian government is the latest to impost conditions on the use of the Astra Zeneca vaccine, it is now not recommended for use on people under 50 due to the risk of blood clots.
• From a technical perspective AUD/USD is consolidating and remains above recent lows having recovered from 0.7532, Apr 1 low. The outlook however remains bearish. The pair has recently breached support at 0.7563, Mar 25 low and also cleared the Feb 2 low of 0.7564. This reinforces a bearish theme following the confirmation of a head and shoulders reversal pattern on Mar 23. This has opened 0.7517, Dec 22 low. Initial resistance is seen at 0.7681, the 50-day EMA.