Flat In Early Trade, Faces Headwinds

AUD/USD capitalized on some softness in the greenback on Friday, consolidating above the 0.76 handle, the pair last changes hands at 0.7638 flat on the session.

• AUD could face some headwinds as Australia's JobKeeper wage subsidy programme ended on Sunday. Official estimates predict up to 15,000 jobs could be lost due to the end of the support measure. Australian Treasury Secretary Steven Kennedy has defended the decision to bring the scheme to an end: "The program has a number of features that create adverse incentives, which are likely to become more pronounced as the economy recovers." RBA's Debelle last week was positive on the labour market, he said the labour market had progressed faster than expected, but noted there were challenges ahead.
• There could be some caution around the latest coronavirus developments; Brisbane, Australia's third most populated city, has declared a three-day lockdown from Monday 29 March due to four confirmed community cases of the UK variant of the virus.
• Tensions with China continue to simmer, Australia's Trade Minister Tehan threatened to take China to the WTO over the weekend due to China's decisions to increase tariffs on Australian wine.
• CBA is pessimistic on the outlook for AUD/USD this week: "AUD/USD will struggle against a firmer USD this week in our view. AUD has fallen below our estimate of its fair value range (0.77‑0.89 US cents, centred on 0.83) in recent days. In our view, firm commodity prices and a weaker USD in the medium term will still pull AUD towards the middle of its fair value range in the back‑end of 2021."
• From a technical perspective AUD/USD maintains a bearish tone. The pair traded lower Tuesday and Wednesday to maintain and has cleared support at 0.7621, Mar 9 low and a bear trigger. The break lower confirms a resumption of the bearish cycle that started at 0.8007, Feb 25 high and paves the way for weakness below 0.7564, the Feb 2 low. On the upside, key resistance has been established at 0.7849, Mar 18 high.
• There is no domestic economic data on the docket today, but a busy week ahead. Highlights include weekly payroll data on Tuesday, private sector credit figures on Wednesday and trade balance & retail sales on Thursday.