Monday saw the AUD gain on trade optimism with AUD/USD rising to two-week highs at 0.7160. The Aussie was aided by USD weakness in light of the US bank holiday which yielded lighter trading and largely contained global markets. Notably we did see the Aussie face selling pressure later in the session as traders looked crystallize profits ahead of the RBA minutes Tuesday morning, ultimately forcing AUD/USD lower to levels around 0.7125.
The Aussie’s rival across the pond was one of the biggest underperformers on Monday with NZD/USD falling from 0.6885 to 0.6840 which allowed the AUD/NZD cross to rise 20 points over the course of the day to reach 1.0410.
Looking ahead, RBA meeting minutes are due out at 11:30am Sydney time with offshore releases such as UK labor market data for December and second tier data due out of both Europe and the USA. Focusing on the RBA minutes, markets are not expecting a great deal of new information, especially given last week’s monetary policy announcement and extensive commentary from Governor Lowe.
Adopting a technical approach, we see first lines of support at 0.7100 followed by 0.7070 and 0.7030 on the downside whilst anticipate topside moves to meet resistance on approach to 0.7145 and 0.7190 respectively.