Vaccine Delays Could Pose Headwinds

AUD/USD slightly lower in early trade, the pair down 4 pips at 0.7619. The rate dropped as low as 0.7588 on Friday before recovering around half the loss.

• CBA sees headwinds for AUD this week, citing delays to the vaccine rollout: "The combination of our outlook for a strong USD and delay in the vaccine rollout in Australia are headwinds to AUD. Nevertheless, the vaccine roll‑out has picked up in the past two weeks. We do not consider the delay in the vaccine rollout is a game changer for the Australian economy. As a result, any AUD weakness because of vaccine concerns is unlikely to be enduring." Australian PM Morrison wrote in a Facebook post over the weekend that the government has not set any targets on the vaccine roll out, and does not intend to do so.
• From a technical perspective AUD/USD is weaker but remains within the recent range and above recent lows. Key support is at 0.7532, Apr 1 low and the outlook remains bearish. The pair has recently breached 0.7563, Mar 25 low and also cleared 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. This has opened 0.7517, Dec 22 low. Initial resistance is seen at 0.7680, the 50-day EMA.
• A quiet week in terms of domestic data releases, the docket for Monday is empty. There is the potential for Port Hedland March iron ore exports data to hit during the session today. Iron ore remains elevated, but trade tensions with China could have negatively impacted exports during the period.