AUD: AUD/USD - Gives Back Gains Overnight

The AUD had a range overnight of 0.6431 - 0.6469, Asia is opening around 0.6435. US Stocks reacted to the break higher in yields and saw some reversion after its recent rally higher. The AUD struggled to hold onto its earlier gains as it drifted lower in the US session in sympathy with stocks.

• “The White House raised pressure on lawmakers to pass Donald Trump’s tax bill, adding that a failure to do so would be the “ultimate betrayal.” House Speaker Mike Johnson said he had a deal to increase the limit on the state and local tax deduction, but some hardline Republicans are threatening to block the legislation.”(BBG)
• “USD declined on speculation that Washington may press the case for a weaker US currency at a Group of Seven meeting this week.”(BBG)
• The AUD/USD is looking comfortable in a 0.6350 - 0.6550 range. The AUD continues to hold up pretty well against the USD so If you want to express a short it looks best to do that in the crosses for now.
• Expect buyers to be around on dips while the support in the AUD holds, a close back below 0.6300/50 would start to challenge the newly formed uptrend.
• Options : Closest significant option expiries for NY cut, based on DTCC data: none, Upcoming Strikes : 0.6375(AUD683m May 23), 0.6550(AUD529m May 23), 0.6510(AUD1.4b May 27)
• CFTC Data shows Asset managers have again added to their shorts, while the Leveraged community once again reduced their shorts last week taking them almost back to square now.
• Data/Event: S&P PMI’s

• Fig 1: AUD/USD spot Hourly Chart

  

  Source: MNI - Market News/Bloomberg