AUDUSD TECHS: Bullish Trend Condition

• RES 4: 0.5682 High Nov 12 ‘24  
• RES 3: 0.6550 61.8% retracement of the Sep 30 ‘24 - Apr 9 bear leg
• RES 2: 0.6528 High Nov 29 ‘24
• RES 1: 0.6515 High May 7 
• PRICE: 0.6374 @ 15:58 BST May 12
• SUP 1: 0.6371/6339 Intraday low / 50-day EMA   
• SUP 2: 0.6275 Low Apr 14    
• SUP 3: 0.6181 Low Apr 11
• SUP 4: 0.6116 Low Apr 10  

AUDUSD continues to trade below last Wednesday’s high. The trend condition is bullish and the latest move down is considered corrective. The recent breach of 0.6450, the Apr 29 high, confirmed a resumption of the uptrend. Note that moving average studies remain in a bull-mode position, highlighting an uptrend. A resumption of the trend would open 0.6528, the Nov 29 ‘24 high. Key support to monitor is 0.6342, the 50-day EMA. 

Compared with the 29-page initial draft Ways and Means framework released last week, the near-400 page House Ways and Means Committee tax bill released today (link via Punchbowl News is here) has a few areas that will continue to be contentious in the days to come:

• Includes a State and Local Tax (SALT) deduction cap increase (to $30k), a major political issue for blue state Republicans (and it's unclear whether this deduction will be large enough for some of them who eyed a figure above $100k, therefore putting this bill in jeopardy of not passing in the House in its current form).
• Includes - per some of Pres Trump's key campaign pledges - a tax break on tips, as well as on car loans, and provides a higher standard deduction for seniors (a way of giving Social Security recipients a tax cut, but falling short of Trump's promise of eliminating taxes on Social Security). But as with the draft release, the text still doesn't include language on a "Millionaire" tax bracket (keeping the top marginal bracket at 37%).
• The bill raises the debt limit by $4T as expected, but that's smaller than the $5T eyed by Senate Republicans.
• Markup of the bill is scheduled to start Tuesday at 2:30pm ET - House Speaker Johnson has aimed to get the chamber to pass the bill by Memorial Day weekend later this month.

• One offsetting factor that is worth watching is the extent of any further weakness in travel-related prices after the surprisingly sharp weakness in March touched on above. US trade policy and broader actions have seen travel to the US continue to slow, and in some cases particularly sharply.
• Canada is a clear example, with Statistics Canada noting today that the number of Canadian-resident return trips to the US by air were down -20% Y/Y in April whilst return trips by automobile were down -35% Y/Y.
• The US side of the ledger isn’t as extreme, with overall foreign-originating flights at 3% Y/Y as they corrected after a weak -10% Y/Y in March although with the two readings likely biased by this year’s later timing of Easter.
• Another caveat to tourism weakness here is that domestic flights account for circa six times as many passengers as international flights.
• Total TSA checkpoint numbers have been broadly mimicking last year’s seasonal pattern, i.e. a flattening after solid growth last year but not yet pointing to a more pronounced moderation.