Trade Tensions Simmer

The greenback weakened on Thursday which saw AUD/USD creep back higher, the pair rising to highs of 0.7764, last down 2 pips on the session at 0.7752.

• From a technical perspective AUD/USD is consolidating in a tight range. The pair broke through 0.7675 on Jun 3 but immediately reversed the sharp move lower. Last week's break lower however does signal the end of the recent broader consolidation since mid-April. A resumption of weakness would open 0.7586, Apr 13 low and 0.7532, Apr 1 low and key support. Initial resistance is at 0.7773, Jun 2 high and 0.7813, May 18 high. A break of the latter would ease bearish pressure.
• There are no domestic releases on the economic docket on Friday, CBA notes: "we expect AUD to continue to be heavily influenced by USD moves into the weekend. Additional comments from Chinese government officials about commodity prices could spark some volatility. The Ministry of Commerce raised concerns about the implications of high commodity prices and the exchange rate for exporters. Both issues have gained policy‑makers attention recently." Elsewhere Australian PM said his government is seeking to take WTO action to resolve its wine-tariff trade dispute with China.