Pressured By Weaker Commodity Complex

Some gains in the greenback and pressure across the commodity complex saw AUD/USD drop towards 0.77 before recovering into the close. Last trades at 0.7748.

• Earlier in the session ANZ Roy Morgan Consumer Confidence fell 0.9% to 110.9. ANZ's head of Australian Economics said the fall does not appear to be linked to the pandemic, but could be related to the withdrawal of the JobKeeper wage subsidy scheme at the end of March.
• From a technical perspective recent AUD/USD gains stalled last week at 0.7800. 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 S/T 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.
• Markets look ahead to the release of RBA minutes from the March meeting, as well as house price data. On the minutes CBA says: "The focus for the minutes will be on further commentary on bond yields and the 3‑year bond yield target. The speech by Governor Lowe on 10 March noted "We are not considering removing the target or changing the target from 10 basis points". Instead, the option of keeping the target on the April 2024 or switching to November 2024 bond will have to be made at some point. We have favoured the target being lifted due to improvements in the economy. However, there is a risk the RBA continue to target the April 2024 bond until it matures."