Consolidating

AUD gained on Friday as the greenback receded, rising to around the familiar 0.7760 level before dropping back. In early trade the rate changes hands at 0.7746.

• CBA sees a mixed outlook for AUD/USD this week: "AUD/USD may be supported by a weakening USD and a recovery in Australian Q1 2021 trimmed CPI (Wednesday). The Australian economy has mounted a remarkable recovery that will spill over into a pick‑up in CPI inflation, wages and market interest rates. Interest rate differentials can move in favour of AUD if Australian inflation provides an upside surprise. A downside risk to AUD against the USD and the JPY is if US equity markets begin to price a material increase in US capital gains tax."
• From a technical perspective AUD/USD is consolidating. Recent gains resulted in a break of trendline resistance drawn off the Feb 25 high and price is back above the neckline of a recent head and shoulders reversal. A pullback, if seen would expose support at 0.7635, Apr 14 low where a break would reverse the recent bullish cycle. Key resistance and the bull trigger has been defined at 0.7816, Apr 20 high.
• No Australian data on the docket today, as a side note markets in New Zealand are shut for the Anzac Day, which may thin out liquidity in the region today.