Round Trip

A round trip session saw AUD/USD finish slightly higher, AUD/USD dropped as low as 0.7606 before recovering into the close. The pair last trades at 0.7663, supported by stronger commodity prices and some weakness in the greenback on lower treasury yields.

• CBA says at these levels AUD is undervalued: "AUD/USD remains slightly undervalued relative to commodity prices in our view. We expect AUD to lift closer to its fair value of 0.83 once concerns about slow vaccine distribution fade and the USD resumes its downtrend."
• From a technical perspective AUD/USD has recovered from last week's Apr 1 low of 0.7532. Nonetheless, the outlook remains fragile. The pair has recently breached support at 0.7563, Mar 25 low and also cleared the Feb 2 low of 0.7564. This reinforces the current bearish theme following the confirmation of a head and shoulders reversal pattern on Mar 23. The move lower opens 0.7517 next, Dec 22 low. On the upside, initial resistance is seen at 0.7664, Mar 30 high.
• Markets look ahead to AiG Performance of Construction Index at 2330GMT/0830AEDT, followed by Markit Australia PMI Services at 0000GMT/0900AEDT and ANZ Roy Morgan Weekly Consumer Confidence at 0030GMT/0930AEDT.