Potential Headwinds From Iron Ore

A stronger greenback saw AUD/USD finish lower on Friday, the pair briefly topped Thursday's high by touching 0.7783 but the move higher precipitated a sharp drop to lows of 0.7719. The pair last changing hands at 0.7729, down 4 pips on the session.

• AUD could face some headwinds from lower iron ore again, prices down over 3.5% in Singapore. From their peak on May 12 prices are now down over 21%. The decline is blames in demand concerns from China as policy makers reiterate a desire to keep commodity prices in check while steel mill margins are also compressed.
• On the coronavirus front Sun Herald reports suggest the government has promised to secure enough Pfizer vaccines to vaccinate all Australians by the end of 2020. Reports suggest that 2m doses a week will be available from the start of October. Around 3.47m people have been vaccinated so far.
• From a technical perspective AUD/USD traded lower Friday but remains within its recent range. A bearish theme dominates, following the recent move lower to 0.7688 on May 13. A firm support zone has been defined at 0.7688-75, the latter is the May 4 low. Clearance of this zone would strengthen a bearish case and signal scope for a deeper pullback towards 0.7586, the Apr 13 low. Initial firm resistance is at 0.7813, May 18 high ahead of the key resistance at 0.7891, May 10 high.
• There are no domestic releases on the economic docket today, participants look ahead to weekly consumer confidence data and merchandise trade data tomorrow.