Bid tone in AUD/USD intact ahead of RBA, takes out 0.77 handle
AUD/USD breaks major resistance at 0.7685 and extends gains to take out the 0.77 handle.
Upside in the pair seems to gain momentum as we head into RBA rate decision due at 0430 GMT today.
Aussie bulls continue to cheer upbeat Australian building approvals data, which staged a solid rebound in March.
Building consents rose 3.7% m/m in March, following a revised 3.1% increase in February, and coming in much better than the forecast of a 1.8% decline.
Broad US dollar weakness across the board in light of a recovery in commodities also supporting upside in the pair.
Very low inflation number had raised the odds of a rate cut, but an overall positive business environment exacerbates the dilemma for the RBA.
Markets are pricing in a strong chance of a cut (circa 60%). Either way, a sharp response from the AUD is assured.
Technically the pair is poised for upside. It has broken major trendline resistance at 0.7685 and is holding above 0.77 handle.
Immediate resistance and support are seen at 0.7716 (April 13th highs) and 0.7687 (10-DMA). We see weakness on breaks below 0.7680 levels.
A steady RBA could see the bulls attacking the late April highs of 0.7760/80 level before a break to 0.7833.
On the other hand, should the bank cut rates, a fast break below the 50 dma at 0.7551 opens 0.7500 and a break there would otherwise confirm the major reversal.
Trade with tight stops - buy dips around 0.77 levels, SL: 0.7670, TP: 0.7730/0.7760/0.7775
Upside in the pair seems to gain momentum as we head into RBA rate decision due at 0430 GMT today.
Aussie bulls continue to cheer upbeat Australian building approvals data, which staged a solid rebound in March.
Building consents rose 3.7% m/m in March, following a revised 3.1% increase in February, and coming in much better than the forecast of a 1.8% decline.
Broad US dollar weakness across the board in light of a recovery in commodities also supporting upside in the pair.
Very low inflation number had raised the odds of a rate cut, but an overall positive business environment exacerbates the dilemma for the RBA.
Markets are pricing in a strong chance of a cut (circa 60%). Either way, a sharp response from the AUD is assured.
Technically the pair is poised for upside. It has broken major trendline resistance at 0.7685 and is holding above 0.77 handle.
Immediate resistance and support are seen at 0.7716 (April 13th highs) and 0.7687 (10-DMA). We see weakness on breaks below 0.7680 levels.
A steady RBA could see the bulls attacking the late April highs of 0.7760/80 level before a break to 0.7833.
On the other hand, should the bank cut rates, a fast break below the 50 dma at 0.7551 opens 0.7500 and a break there would otherwise confirm the major reversal.
Trade with tight stops - buy dips around 0.77 levels, SL: 0.7670, TP: 0.7730/0.7760/0.7775
Trade closed: stop reached