The Australian Dollar surged past the 0.7070 resistance level to 0.71470 overnight and 23 April 2019 high before easing to settle at 0.7125 in late New York. Despite an alarming rise of 374 new cases in Victoria, the country’s coronavirus hotspot, it paled in comparison to the continuing upsurge in both infections and death from Covid-19 in the United States. The market’s risk-on tone also fuelled the Aussie’s surge as did strong metals prices.

Yesterday RBA Governor Philip Lowe gave the green light to the government to lock in a budget deficit by large spending to support the economy. Lowe said though that policymakers will not “print money” to support the spend. Lowe also said that he was concerned about the labour situation and signalled possible rate cuts.

Australia’s Retail Sales report today is forecast to climb 7.1% in June following May’s 16.9% rise. Anything lower than 7.1% could see a corrective move lower in the Aussie. Market positioning at the last COT report was basically square on the Battler. That would have changed to a long net position considering the Aussie’s climb.

AUD/USD has immediate resistance at 0.7150 followed by 0.71280. Immediate support can be found at 0.7080 followed by 0.7040. Look for a likely range today between 0.7040-0.7140. Prefer to sell rallies at current levels as a likelihood for a corrective move south builds.