AUD/USD: 0.9955The Aud remains under pressure after yesterdays softer than expected Chinese data but is sitting on channel support and is also in oversold territory, so we need to make room for a bounce back above parity, which, if seen would present new selling opportunities.
There is no data today and it may be a quiet session ahead of the Federal Budget this evening (7.30 pm AET). The market will focus on how the Government intends to reign in the budget deficit and return to surplus over the next 4 years, and if it does not like what it sees, will put the pressure firmly back to the downside. A budget deficit of $11 bio is written in for this FY.
The initial support is at 0.9900 and then at the strong level of 0.9850, this being the base of the long term triangle. I don't think we are heading much below there for the time being but there is further support at 0.9800 and 0.9750.
If we do see a bounce, there will be good sellers now at parity. Above this we could see a squeeze to 1.0090 (23.6% of 1.0581/ 0.9940) and even to the top of the channel, which is also the 38.2% Fibo resistance at 1.0185. I would not expect to see it this high, and anything over 1.0000 now appears to be a good sell opportunity for the next leg lower.
Economic data highlights will include:
Federal Budget
