Vaccine Brinkmanship

The greenback weakened on Tuesday which saw AUD/USD push higher, closing near session highs, last at 0.7643, recovering from intraday lows of 0.7586. The greenback was hit lower after a higher than expected CPI figure which saw DXY slip to April lows.

• CBA expects further upside for AUD/USD: "We maintain our view that AUD/USD can lift further because it is comfortably below our estimated range of fair value (0.78‑0.89). In fact, we have been one of the more bullish forecasters for AUD/USD for the past six months"
• Australia's trade minister Tehan will reportedly travel to Europe to talk with counterparts over the restriction of vaccine exports from Europe. Tehan is seeking to find ways to work with the EU to enhance the global supply of vaccines.
• From a technical perspective AUD/USD remains within its recent range and above the early April low. Key support is at 0.7532, Apr 1 low and the outlook is bearish. The pair has recently breached 0.7563, Mar 25 low and the Feb 2 low of 0.7564. This reinforces a bearish theme following the confirmation of a head and shoulders reversal pattern on Mar 23. The focus is on 0.7517, Dec 22 low. Initial resistance is seen at 0.7677, Apr 7 high.
• Westpac Consumer Confidence is on the docket today, but is unlikely to move markets, participants look ahead to labour market data on Thursday.