Buoyant Despite Lockdown

Spot AUD/USD gained over 1% last week and closed just below highs, the pair has gained slightly in early Asia-Pac trade on Monday, last up 6 pips at 0.7767.

• The pair has been buoyant despite the announcement of a cluster of cases and subsequent lockdown in Victoria. CBA is sanguine on the effects of the lockdown: "AUD/USD is unlikely to be heavily influenced by the lockdown in Victoria. Victoria re‑entered a 5‑day Level 4 lockdown on Saturday because of an outbreak of the highly contagious UK Covid‑19 variant. Nevertheless, the lockdown will result in a short, sharp contraction in the Victorian economy. Victoria accounts for 25% of Australia's GDP."
• In terms of options there AUD 799m 0.7730 puts expire on Monday.
• From a technical perspective AUDUSD edged higher Thursday and maintains a firmer posture. Price action on Feb 5 highlights a reversal signal following the recent inability to clear the 50-day EMA. The pair has breached resistance at 0.7704, Jan 29 high and this signals scope for a climb towards 0.7782/7820, the Jan 21 high and Jan 6 high respectively. The latter is also a bull trigger. On the downside, a break of 0.7564, Feb 2 low would resume recent bearish pressure
• The economic docket has no data releases today, releases this week include RBA meeting minutes on Tuesday while the highlight is labour market data on Thursday.