- AUD/USD bears seeking a break of daily support.
- Risk-on is supporting both the commodity complex and high beta-FX.
At the time of writing AUD/USD is opening the week near 0.75 the figure following a risk-on end to the week on Friday as equities printed fresh record highs and the commodity complex benefitted from a weak US dollar.
DXY slipped from a high of 92.541 to a low of 92.090 as risk appetite returned with the rally in US Treasuries running out of steam and global stock markets steadying.
The CRB index, consequently, added 1% recovering from a strong correction from the monthly highs leaving it in good stead to start the week bullish, supportive of the commodity-linked currencies.
Meanwhile, there is a risk of coronavirus.
While the main suite of COVID vaccines are still highly effective against the Delta variant in terms of preventing serious disease, pockets of the US still have extremely low vaccination rates and high rates of vaccine scepticism, and concerns are rising that a virus surge is possible,” analysts at ANZ Bank said at the start of this week,
”The situation is likely to reduce enthusiasm for both business and leisure travel to other Australian states also, as the risk of getting stuck is patently real.”
Data wise, the domestic focus is on the Employment Rate.
Analysts at TD Securities said that it likely fell in June due to the lockdown in Victoria, with a decline in overall payrolls (-0.6% m/m) between the Jun LFS survey period and the May LFS period.
”On participation rate, we expect it to edge up to 66.3% (last:66.2%) as labour demand remains robust. We expect an uptick in the unemployment rate (u/e rate) to 5.4% from 5.1% previously.”
As for the US, Core Consumer Prive Index MoM and Retail Sales MoM will be key.
The price is at a crossroads at this juncture from a daily perspective. Given the bearish bias, a break of support would be expected to result in a downside extension.
