AUDUSD TECHS: Pierces Bull Trigger

• RES 4: 0.6700 76.4% retracement of the Sep 30 ‘24 - Apr 9 bear leg
• RES 3: 0.6688 High Nov 7 ‘24
• RES 2: 0.6677 0.764 proj of the Jun 23 - Jul 11 - 17 price swing  
• RES 1: 0.6541/6625 High Aug 7 / 24 and the bull trigger
• PRICE: 0.6507 @ 15:32 BST Aug 11
• SUP 1: 0.6419 Low Aug 1
• SUP 2: 0.6373 Low Jun 23 and a bear trigger 
• SUP 3: 0.6354 38.2% retracement of the Apr 9 - Jul 24 upleg  
• SUP 4: 0.6323 Low Apr 16

AUDUSD rallied well off the week’s lowest levels last week on broad USD weakness - erasing any signs of a bearish breakout on the show through the 20- and 50-day EMAs. While support at 0.6455 the Jul 17 low, has been cleared, the recovery in prices keeps key resistance in focus at 0.6625 the Jul 24 high. It also represents the bull trigger. Any return lower would signal a bearish threat into 0.6373, the Jun 23 low. 

Treasury's monthly fiscal statement for July is expected to be published Tuesday (1400ET), but the Congressional Budget Office has already produced its usually pretty accurate estimate.

• The CBO estimates a $289B deficit was recorded in July, on $628B in spending (up 9% Y/Y) and $339B in receipts (up 3%). Notably in the latter column, customs duties rose $18B (252% Y/Y).
• If correct, the FY2025 cumulative deficit is running at about $1.626T with two months to go in the year, vs $1.517T in the same period of FY2024.
• That's a $109B increase, but accounting for timing changes (which increased FY2023 outlays, benefiting the FY2024 picture), the deficit this year would have been just $37B larger at this point.
• That's a 2% increase but compares to an anticipated 3+% Y/Y nominal increase in GDP in Q3 (Fiscal Q4).
• At the start of 2025, CBO estimated a $1.9T deficit this fiscal year; that's still in play with August typically seeing a large deficit ahead of a better outturn in September in part on tax receipts, though looks a little on the high side at this point. CBO will publish the Monthly Budget Review with its final projection next month.

[The below is a small section on latest travel demand in the US from the MNI US CPI Preview ahead of Tuesday's CPI report for July]

• Travel-related prices have been a source of generally larger than expected disinflationary pressure in recent months, although some travel data crudely suggest we might have seen the peak for this sequentially.
• TSA checkpoint numbers have returned closer to last year’s seasonal pattern after some weakness in prior months.
• APIS data meanwhile have stabilized at low Y/Y rates with US citizens returning rising 3.6% Y/Y in July (after 1.4% Y/Y in June or 3% Y/Y averaged since February) and foreign originating flights -4.9% Y/Y (after -6.6% Y/Y in June or -5% Y/Y since February).