Recent Gains Still Considered Corrective

The greenback retraced some of its Friday loss in the overnight session which pressured AUD/USD, the rate finished 0.22% lower having bounced off resistance at 0.7285. The pair last down 3 pips at 0.7294.

• From a technical perspective AUD/USD maintains last week's firm tone and has traded above the 20-day EMA. Recent gains are still considered corrective though. The breach of 0.7290 on Aug 17 confirmed an extension of the bearish price sequence of lower lows and lower highs, reinforcing the current downward cycle. Price has also cleared 0.7200 and this opens 0.7053 further out, a Fibonacci retracement. The next firm resistance is seen at 0.7389, Aug 11 high.
• Data just released from ANZ Roy Morgan showed weekly consumer confidence rose slightly to 101.8 from 101.6. Looking ahead to the rest of Tuesday's Sydney session, the release of the latest round of Q2 GDP partials, in the form of net exports and BoP current a/c data, will be bolstered by building approvals and private sector credit data.