AUD/USD

The US dollar snapped its 3-day winning streak and formed a bearish outside day, helping gold reach our upside target. EUR/USD and AUD/USD are now eyeing a move towards key resistance levels.

The Australian dollar handed back all of its pre-RBA gains, which was trying to notch up a fifth consecutive bullish day on anticipation of a more hawkish RBA. Yet the statement was not overly hawkish and Governor Bullock said the RBA “believe rates are at the right level to get inflation back to target”. Inflation was revised higher to show inflation falling back to target at a slower pace and the RBA remain “vigilant” to upside risks.

The Reserve Bank of Australia (RBA) kept Australia’s cash rate unchanged at 4.35% in May but refrained from increasing its longer-term underlying inflation forecasts, limiting the risk of a near-term interest rate hike.

Both gold and GBP/JPY are showing signs of stability around key support levels to suggest they could extend their bounce. But with AUD/USD rising for four days on anticipation of a hawkish RBA, whether AUD/USD can extend its rally beyond resistance is up for question.

Stickiness in services and domestic inflation, accompanied by continued resilience in labour market conditions, points to the likelihood of the RBA striking a more hawkish tone in its May monetary policy meeting, creating upside risks for the Australian dollar

The BOJ's intervention prevented large speculators from reaching a record level of net-short exposure, asset managers continued to trim net-long exposure to the US dollar and US indices and also flipped to net-long the VIX.

The US dollar fell for a second day after the Fed closed the door on any further hikes. And that places today’s nonfarm payroll report (NFP) into focus. But given NFP’s tendency to beat estimates in recent history, perhaps the US dollar could be setting itself up for a bounce. We take a look at key levels for US dollar index, USD/JPY, USD/CAD and AUD/USD.

A surprise rise in US wage pressures weighed on sentiment on the eve of the Fed meeting, sending the US dollar broadly higher, Wall Street lower as AUD/USD suffered its second worst day of the year.

Whether you want to call it a bullish hammer, dragonfly doji, false break or morning star, the price action on the AUD/USD daily suggests the path of least resistance is higher in the near-term.

Australians are none the wiser as to what’s happening in the domestic labour market with another volatile jobs report creating more questions than answers. AUD/USD is largely unmoved, leaving offshore factors to remain in the driving seat.

The US dollar snapped a 6-day winning streak to allow AUD/USD to rebound from 64c in line with yesterday’s bias. And if AU employment figures perform today, it could extend its gains for a second day.

A risk-off tone ensued across global markets to send the US dollar higher, to the detriment of AUD/USD and the ASX 200.

Contrary to what you may expect, movements in AUD/USD on Tuesday may be dictated by the performance of Chinese financial markets rather than the latest batch of Chinese economic data including Q1 GDP.

1-day implied volatility levels for USD/JPY, EUR/USD and NZD/USD have blown out ahead of today’s key events, which includes comments from BOJ’s governor, and RBNZ cash rate decision and the US inflation report.

Momentum is turning higher for AUD/USD during a month that tends to promote positive returns, and gold bulls continue to dominate price action as it reaches yet another record high.

US dollar bears wasted no time to short the buck after a soft ISM services report, to mark its second worst day this year - in a month usually associated with losses.

With ample good news priced into the US dollar outlook and a big reversal in the AUD/USD on Tuesday, there are signs the torrent of bearish sentiment may be slowly turning around.