The Australian Dollar rebounded strongly to trade above 0.65 cents, its highest in over a week boosted by upbeat domestic and Chinese trade data and a risk-on stance in US trading. Reports that US and Chinese trade negotiators plan to talk as early next week lifted risk sentiment and pushed equities higher in late New York trade. Broad-based US Dollar weakness also contributed to the Aussie’s strength.
The RBA releases its latest monetary policy statement and economic projections which are forward looking. This has the potential to move the markets more than the recent RBA policy meeting which was earlier this week. US Non-Farms Payrolls report will also impact the Aussie, which has shown remarkable strength against the US Dollar and other currencies. Speculative market positioning is also short AUD bets, which is a positive.
Where does the risk lie? A disappointment from today’s RBA report, and a reverse USD rally after tonight’s Payrolls report could see Aussie bulls disappointed. AUD/USD has immediate resistance at .6510 and 0.56550. The big resistance level is at 0.6600 cents. Immediate support can be found at 0.6460 followed by 0.6410. Look for an initial trading range between 0.6430-0.6530. Prefer to sell rallies.
