Weaker Greenback & Iron Ore Sees AUD/USD Climb For Third Day

A weaker greenback and firmer iron ore prices helped AUD/USD post another session of gains, the third higher finish for the pair this week. The rate climbed from an Asia-Pac nadir of 0.7538 to highs of 0.7599 before closing at 0.7575. The rate last changing hands at 0.7576.

• From a technical perspective AUD/USD is consolidating. The outlook remains bearish following recent weakness. The pair has traded below key support at 0.7532 Apr 1 low and price has also breached the 200-dma. The move lower confirms a resumption of the reversal that occurred Feb 25 and signals scope for a deeper pullback towards 0.7462 next, the Dec 21, 2020 low. On the upside, initial resistance is at 0.7645, the Jun 17 high.
• There are no domestic releases on the economic docket today. Looking ahead the RBA remains the key catalyst for AUD. CBA writes: "We are still looking towards the RBA's 6 July policy meeting as the catalyst for the next substantial move in AUD. The RBA stands out as one of the more 'dovish' central banks despite the strong outlook for the Australian economy. The irony is the Australian labour market is tighter than the US labour market. The strength in the Australian labour market is one of the key drivers of our view that the RBA will raise interest rates in November 2022, well ahead of the RBA's "2024 at the earliest guidance." Nevertheless, if the RBA lays the groundwork for a policy change, particularly a tapering of asset purchases, at its 6 July meeting, AUD can recover some of its recent losses."