Plumbs Lows

The greenback rose on Thursday which put pressure on AUD/USD, the pair dropping as low as 0.7690, the lowest since April 14, before recovering modestly into the close. The pair last down 6 pips at 0.7701. The USD saw strength after US President Biden unveiled his tax plan which contained a provision to tax high earners 43.4% capital gains, equities fell following the report and safe assets caught a bid.

• Elsewhere, Australian Trade Minister Tehan is in the UK for trade talks, after a slightly prickly start with leaked reports that UK officials said the pace of negotiation was glacial the two sides said they had made progress, with media reports that Australia PM Morrison wants to sign a deal with UK PM Johnson at the G7 summit in June.
• From a technical perspective recent gains resulted in a break of trendline resistance drawn off the Feb 25 high and note, price is back above the neckline of a recent head and shoulders reversal pattern. A deeper pullback though 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.
• Markets look ahead to preliminary April PMI data at 0000BST/0900AEST, the figures are not expected to be a market mover.