AUD/USD

The growth engine of the Chinese economy unexpectedly decelerated last month while Australian retail sales are growing at the weakest pace on record outside one-off economic shocks, putting AUD/USD under renewed pressure on Tuesday.

Despite the MOF's best attempts, USD/JPY is holding above 155 - a level traders are clearly watching. AUD/USD shows the potential to extend gains into 66c, but having risen for 6 days already then perhaps the upside potential it limited.

May has historically been the second-worst month for EUR/USD (-0.62%) and GBP/USD (-0.37%) - see what to watch for from the other major currency pairs!

There seems to be no fear in shorting then yen, given large speculators pushed net-short exposure to the second highest level on record last week. EUR/USD and GBP/USD also flipped to net-short exposure.

AUD/USD is charging higher, powered by a hotter-than-expected Australian March quarter consumer price inflation report that has seriously dented the case for rate cuts from the Reserve Bank of Australia this year.

The US 2-year bond yield remains support, which is capping the yield at 5% and weighed on the US dollar. And that helped AUD/USD rise for a second day ahead of a key AU CPI report.

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.

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.

A stronger-than-expected ISM manufacturing report sent the US yield curve and the dollar higher, sending USD/JPY within reach of 152 and AUD/USD lower.

AUD/USD remains a sell-on-rallies prospect in a week where interpretation of Fedspeak and US labour market data will dominate. It will be imperative for the US data to portray a message of continued economic strength to see meaningful downside materialise.

GBP/USD has historically seen its strongest gains in April, while USD/CAD has seen its worst performance in April and is testing resistance at its 4-month highs near 1.3600.

At the end of last week, I highlighted a potential bearish continuation pattern on AUD/USD. But the further this week has progressed, the more I have questioned its potential to break lower.

Australia’s inflation report undershot expectations in February, although there’s still evidence of stickiness in underlying price measures. Markets reacted by bidding Australian government bonds which have pressured AUD/USD, seeing it test uptrend support. A break could see the Aussie revisit its 2024 lows.

An increase of bearish bets against AUD/USD pushed net-short exposure to a record high among large speculators.

AUD/USD is threatening to break the uptrend it’s been in since October, failing to find traction despite what was the largest coordinated central bank dovish pivot since the start of the pandemic last week. With little event risk on the calendar, the fortunes of AUD/USD may be determined by USD/CNY following a dramatic end to trade in Chinese markets on Friday.

Due to the shorter trading week, we take a look at how AUD/USD has performed around Easter over the past 30 years.