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Commodity Currencies Boosted


AUD rose sharply alongside other commodity currencies following the BoC decision during the US session, the BoC scaled back bond purchases and raised the outlook on a recovering world economy and easing volatility. AUD/USD rose to 0.7762 from around 0.7710, and then moved in a narrow range for the remainder of the session. The rate last changes hands at 0.7753.

  • Meanwhile, the Australian government has announced it has cancelled the agreement between China's Belt and Road Initiative and the Victoria state government saying the arrangements are not consisted with Australia's foreign policy. The move could serve to further increase tensions between the two countries.
  • From a technical perspective AUD/USD maintains a firmer tone following last week's break of 0.7677, Apr 7 high and this week's follow through. Recent gains also resulted in a break of trendline resistance drawn off the Feb 25 high and note, price is back above the neckline of a recent head and shoulders reversal pattern. Initial firm support is at 0.7706, Feb 14 and 19 low gave way, although prices quickly snapped back above. A clear break would concern bulls and instead expose 0.7635, Apr 14 low.
  • A limited economic docket, Q1 NAB Business Confidence will hit at 0230BST/1130AEST, while tomorrow brings preliminary April PMI readings.

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