Hitching A Ride Higher

A weaker greenback in the wake of the FOMC saw the rate break out of its recent range and make a beeline for the 0.78 handle, the pair has struggled to consolidate above the level though, last trades at 0.7803.

• From a technical perspective the pair tested, but failed to meaningfully clear last week's 0.7800, which is becoming a more notable level of resistance. The broader outlook remains bearish following the sharp sell-off between Feb 29 - Mar 9. Furthermore, the breach on May 5 of 0.7693, Feb 26 low reinforces the current short-term bearish theme, signalling scope for weakness towards 0.7564, Feb 2 low. Firm short-term resistance has been defined at 0.7838, high Mar 2 and 3. A break would alter the picture, allowing for a stronger recovery.
• The local docket is headlined by unemployment data at 0030GMT/1130AEDT, the headline unemployment rate is expected to drop to 6.3%, with employment change forecasted at a gain of 30k. CBA's forecasts are in line with the consensus: "We estimate employment lifted by 30,000 and the unemployment rate fell to 6.2% (from 6.4% in January). An unemployment rate of 6.2%, despite moving in the right direction, suggests we are still some way from the higher wages growth and inflation that the RBA will need to see before raising the cash rate target. In his recent speech, Governor Lowe indicated full employment in Australia may be an unemployment rate of 4.0%‑4.5%."
• Also due later is a speech from RBA's Kent at 0105GMT/1205AEDT, Kent spoke yesterday and struck an overall dovish tone.