Languishes Near 3-Month low

Further gains in the greenback saw AUD/USD finish lower on the session, DXY has now gained for eight of the past ten sessions. The rate is ow at the lowest level since late December 2020 after dipping below 0.76 – last trades at 0.7587.

• Some of the weakness in AUD has been attributed to losses across the commodity complex, an opinion that CBA concurs with: "The oil price in particular was weak despite that boat still being stuck in the Suez Canal. Commodity prices are still high though. And AUD/USD is still low compared to commodity prices. But in the near term, while the US economy diverges from Europe, AUD will struggle against a strengthening USD."
• There were reports in The Australian that the domestic economic recovery has resulted in a reduction of the budget deficit by AUD 23bn as more than expected are able to relinquish support measures and tax payments increase.
• From a technical perspective AUD/USD remains bearish. The pair traded lower Tuesday and Wednesday to maintain a softer tone 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.