Holding Recovery

AUD/USD staged a recovery on Friday, rising from lows of 0.7714 in Asia to peak at 0.7787, the pair last trades at 0.7782.

• From a technical perspective AUD/USD started the week well, but traded poorly Thursday, hitting new weekly lows of 0.7688 and denting the outlook further. This comes despite the pair recently clearing the April highs, which had triggered bullish signals. In order for the uptrend to resume, markets need to top the 76.4% retracement of the February - April downtick at 0.7895. A break here would strengthen bullish conditions and point the needle toward the year's best levels printed in late February at 0.8007.
• CBA are positive on the outlook for the pair. The bank says: "AUD/USD can recover after last week's one cent fall. Local economic data will be more important for AUD this week. We estimate wages expanded by 0.5%/qtr in Q1 21, though there are upside risks as business unwind wage freezes (Wed). We estimate employment increased by 40,000 in April compared to the consensus estimate of 20,000 (Thu). We note the consensus of Australian economists has systematically under‑estimated the recovery in employment by over 700,000 since June 2020."
• There are no domestic releases on the docket today, markets look ahead to the RBA Minutes release tomorrow and employment data later in the week.