AUD/USD holds below 0.6700, at weekly lows
- US Dollar mixed on a relatively quiet Monday.
- Key events ahead: Australia CPI on Wednesday and US Q1 GDP on Thursday.
- AUD/USD weakens, but losses are limited on low volume.
The AUD/USD is falling on Monday for the second day in a row, consolidating below 0.6700. In a quiet session, the US Dollar is mixed and equity prices in Wall Street are falling modestly.
Sideways, looking south
Data released on Monday showed the important Chicago Fed National Activity Index remained unchanged in March at -0.19, and the Dallas Fed Manufacturing Index came in at -23.4 well below the -15.7 of market consensus. The numbers had no significant impact on subdued markets. US yields are falling modestly weighing on the Greenback.
The key event in the US will be on Thursday with growth numbers from the first quarter. No Federal Reserve officials will speak this week ahead of the FOMC May 2-3 meeting.
In Australia, the critical report will be on Wednesday, with Q1 and March Consumer Price Index, the last crucial report ahead of next week’s Reserve Bank of Australia (RBA) meeting. At the moment, the odds favor a new pause from the RBA.
Short-term outlook
Technically the outlook for the Aussie has worsened after the AUD/USD dropped below the 20-day Simple Moving Average (SMA). The pair bottomed on Monday at 0.6665 and then rebounded modestly. The key support is the 0.6630 area, ahead of the March low at 0.6618. A recovery above 0.6700 should strengthen the Aussie, with the next resistance at 0.6740.