AUD: Asia Wrap - AUD/USD Trades Heavy As Market Eyes Tariff Deadline
The AUD/USD had a range Friday night of 0.6507- 0.6565, Asia is trading around 0.6510. The AUD/USD drifted off the 0.6600 area once again as stocks pared back some of its recent gains as the market eyes the tariff deadline approaching this week. Look for more consolidation again in the AUD/USD as the pair continues to try build a base from which to move higher. The risk to this is clearly around President Trump escalating trade tensions this week, which could make it a choppy week. First support is towards 0.6500 then more importantly the 0.6350/0.6400 area.
- (Bloomberg) -- “Australia’s May spending data presents a conundrum — are consumers struggling, or thriving? Weak retail trade data on Wednesday suggests consumers, plagued by uncertainty, are keeping their wallets shut. Stronger-than-expected broader spending data on Friday shows a weather-related pickup in winter clothes shopping was complemented by a discretionary surge in car sales and hospitality spending.”
- The AUD/USD is attempting to break through the top of its recent range as the pressure on the USD increases. The move higher does seem to be stalling though as the market eyes the tariff deadline. First support is towards 0.6500 then more importantly the 0.6350/0.6400 area.
- The AUD needs a sustained break above 0.6600 to potentially start building momentum for an extended move higher, a close back above 0.6600 and the focus would turn back to 0.6900/0.7000.
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6600(AUD884m), 0.6500(AUD 510m), 0.6700(AUD 652m). Upcoming Close Strikes : 0.6650(AUD857m July 10), 0.6375(AUD722m July 8)
Fig 1: AUD/USD spot Hourly Chart
Source: MNI - Market News/Bloomberg Finance L.P
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JGB TECHS: (M5) Rallies Off Lows
- RES 3: 147.74 - High Jan 15 and bull trigger (cont)
- RES 2: 146.53 - High Aug 6
- RES 1: 141.48/142.95 - High May 2 / High Apr 7
- PRICE: 139.19 @ 15:53 GMT Jun 06
- SUP 1: 138.54 - Low May 22
- SUP 2: 136.57 - 1.382 proj of the Jan 28 - Feb 20 - Feb 26 bear leg
- SUP 3: 134.89 - 2.000 proj of the Jan 28 - Feb 20 - Feb 26 bear leg
JGBs have rallied off recent lows, however a bearish theme remains intact following the reversal that started Apr 7. A continuation lower would signal scope for an extension towards 136.57, a Fibonacci projection. On the upside, a reversal higher would instead refocus attention on 142.95, the Apr 7 high. The first important resistance to watch is 141.48, the May 2 high. A break of this level would be viewed as an early bullish signal.
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We've just published our UST Issuance Deep Dive - Download Full Report Here
- May’s refunding round saw guidance as well as coupon sizes for the current quarter unchanged.
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Treasury had $84B in "extraordinary measures" available to keep the government financed as of June 4 per a release Friday. That is up from $68B a week earlier though Treasury has exhausted three-quarters of the total initially available ($362B) when the debt limit impasse began in January.
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