AUD/USD: awaiting trade balance while bulls line-up 0.76 handle again

Currently, AUD/USD is trading at 0.7584, up 0.02% on the day, having posted a daily high at 0.7590 and low at 0.7577.

US dollar index erases daily gains after FOMC statement

AUD/USD has been in consolidation since 21st Jan and is a mixed bag with the US dollar finding some traction again with better looking US data ahead of this week's key nonfarm payrolls event. 

The manufacturing jobs were good overnight as was the ADP report as a positive prelude for this weeks next main event. However, for today we have the Aussie trade balance and analysts at Westpac explained that the spike in commodity prices has seen the trade balance move into surplus. "A consolidation is expected in Dec, a surplus of $1.5bn. Dwelling approvals bounced 7% in Nov after a 20% fall over the previous three months. The high-rise boom is clearly ending."

AUD/USD 1-3 month outlook: 

the analysts at Westpac are calling for lower to 0.7400 on a medium-term outlook. "The US dollar’s impressive post-election rally may have paused, but still has potential to rise further during the months ahead. The Fed’s assertive tightening bias plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar. Against that coal and iron ore are likely to sustain a good portion of their dramatic rises, and economic data for Q4 and Q1 should improve, but these forces are subservient to the US dollar’s trend. Australia’s AAA rating will remain an issue into the May budget." 

AUD/USD levels

AUD/USD’s recent high of 0.7608 was not been confirmed by the daily RSI ... but it has not sold off and, currently, analysts at Commerzbank suspect it is attempting to stabilise ahead of tackling the 0.7610/45 recent high and Fibo resistance. "Only above 0.7645 will introduce scope to the 0.7778/.7850 2016 highs and the 38.2% retracement. Currently, the market’s dip lower is indicated to terminate circa 0.7505/.7435. We suspect that prices will need to go sub 0.7400, the 55 day ma, to alleviate upside pressure and trigger losses to 0.7312/00 then 0.7161/64, the recent lows."