AUD: Weaker US Equity Futures Weigh On AUDUSD In Early Monday Trading
AUDUSD was unable to hold breaks above 64c on Friday and finished down 0.2% to 0.6397 after a trough of 0.6375. All G10 currencies were lower against the US dollar (BBDXY +0.2%) with Aussie one of the better performers helped by positive risk appetite. AUDUSD tried again today to breach 64c reaching 0.6407 but is now at 0.6396, as US equity futures fall.
- The bullish theme in AUDUSD remains intact with the break of key resistance at 0.6409 reinforcing this. Initial resistance is at 0.6439, while support is at 0.6344.
- The yen underperformed in the better risk environment leaving AUDJPY 0.6% higher at 91.92. It is around this level in today’s trading. Kiwi also struggled in this environment with AUDNZD up 0.4% to 1.0730 reaching 1.0736, its highest since Monday.
- The euro and pound performed in line with the AUD. AUDEUR reached 0.5664 in Friday’s APAC trading but then trended down to 0.5613. It finished slightly higher at 0.5630 and is currently around 0.5635. AUDGBP was little changed at 0.4806.
- Equities rallied with the S&P up 0.7% and Euro stoxx +0.8% but the S&P e-mini has started the week lower (-0.2%). Oil prices rose with WTI +0.6% to $63.17/bbl. Copper fell 0.2% and iron ore is lower at around $98/t.
- There are no data or events in Australia today. The focus this week will be on Q1 CPI on Wednesday.
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Historical bullets
USDCAD TECHS: Bullish Outlook
- RES 4: 1.4700 Round number resistance
- RES 3: 1.4641 76.4% retracement of the Feb 3 - 14 bear leg
- RES 2: 1.4452/4543 High Mar 13 / 4 and a bull trigger
- RES 1: 1.4402 High Mar 20
- PRICE: 1.4292 @ 16:50 GMT Mar 28
- SUP 1: 1.4235 Low Mar 26 and a key near-term support
- SUP 2: 1.4151/4107 Low Feb 14 / 50.0% of Sep 25 - Feb 3 bull run
- SUP 3: 1.4011 Low Dec 5 ‘24
- SUP 4: 1.3944 61.8% retracement of the Sep 25 ‘24 - Feb 3 bull cycle
USDCAD traded through support at 1.4242 on Wednesday but has recovered. A return lower and clearance of this level would undermine the bull theme and instead highlight potential for a test of 1.4151, the Feb 14 low and a bear trigger. Moving average studies continue to highlight a dominant uptrend. A reversal higher would refocus attention on the bull trigger at 1.4543, the Mar 4 high. First resistance is 1.4402, the Mar 20 high.
US FISCAL: Debt Limit "Extraordinary Measures" Pick Up, But Cash Dipping Pre-Tax
Treasury data shows that there were $207B of "extraordinary measures" available to circumvent hitting the debt limit as of Wednesday Mar 26.
- That's the most since Jan 27th and up from $163B a week earlier, from a total $376B available.
- However, Treasury cash in the TGA fell to $316B as of the 26th (and was down to $280B on Thursday), meaning there were a combined $523B of resources available to avert the debt limit, the lowest since the impasse began in January (and half of the starting amount of just over $1T).
- The next couple of weeks will be very important for Treasury, as they represent the biggest tax take of the year. The Congressional Budget Office reported this week that per its estimates "if the debt limit [$36.1T] remains unchanged, the government's ability to borrow using extraordinary measures will probably be exhausted in August or September 2025." Treasury wrote to Congress this month that they would be able to provide an update on the x-date in the first half of May, after the conclusion of tax season.
AUDUSD TECHS: Remains Above Support
- RES 4: 0.6429 High Dec 12 ‘24
- RES 3: 0.6414 38.2% retracement of the Sep 30 ‘24 - Feb 3 bear leg
- RES 2: 0.6409 High Feb 21 and a bull trigger
- RES 1: 0.6391 High Mar 17 / 18
- PRICE: 0.6291 @ 16:46 GMT Mar 28
- SUP 1: 0.6258 Low Mar 21
- SUP 2: 0.6187 Low Feb 4
- SUP 3: 0.6171/6088 Low Feb 4 / 3 and a key support
- SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
AUDUSD is unchanged. A short-term bull theme is intact and the latest move down appears corrective. Key short-term support to watch is 0.6187, the Mar 4 low. Clearance of this level would reinstate a bear threat. First support is at 0.6258, the Mar 21 low. A stronger recovery would refocus attention on 0.6409, the Feb 21 high. Clearance of this hurdle would strengthen the bull cycle and resume the uptrend that started Feb 3.
