Services PMI Rises

The dollar index strengthened during yesterday's Asia-Pac session and held its gains during European and US hours, this kept pressure on AUD/USD, even after the RBA kept rates on hold and issued a more optimistic assessment of growth. AUD/USD fell as low at 0.7675 before bouncing, last trades at 0.7714.

• Data earlier in the session showed HIS Markit Australia April Services PMI at 58.8 vs 55.5 in March, while Composite PMI came in at 58.9 vs 55.5 in March. Commenting on the latest survey results, Jingyi Pan, Economics Associate Director at IHS Markit, said: "April PMI data signalled that business activity across the Australian service sector rose at the strongest pace since data collection began in May 2016, reflecting further moves towards recovery. This was aided by the further easing of COVID-19 restrictions which boosted customer confidence and demand alike."
• From a technical perspective AUD/USD showed below first support at 0.7691, the Apr 22 low, ahead of the London close. This negates the bullish price structure that had dominated after the recent break of a trendline resistance drawn off the Feb 25 high. THis opens losses toward 0.7635 and 0.7586 key support. Resistance is unchanged at 0.7816/18 the 18 Apr 29 highs. A clear break would open 0.7849, the Mar 18 high.
• Participants look ahead to housing data later in the session, the market already has one eye on Thursday's address from RBA Deputy Governor Debelle given the language deployed in the statement released alongside yesterday's RBA decision.