- Data released earlier today showed Aussie home sales dropped to from 8.9% to -4.7% in April. AUD/USD hit lows of 0.7148.
- US Dollar strength seen across the board after Yellen in her speech on Friday last week said that a rate-hike is due “in the coming months".
- Divergence between the RBA and Fed to keep pressure on the pair, while commodities struggle to keep the momentum up.
- CTFC data showed leveraged funds pared back on their net longs in commodity currencies across the board, but most notably in the AUD.
- On the daily charts, Spinning top formed in the Asian session till now, 5-DMA at 0.7190 capping upside.
- Momentum studies are bearish, 200-DMA at 0.7251 weighs heavily on the upside, bearish invalidation only on breaks above.
- Weekly charts are biased lower, we see scope for test of 0.7042 (78.6% Fib). Little support seen below 0.7108 (Feb 29th lows).
- US markets remain closed on a Memorial Day holiday and traders likely to track sentiment across markets amidst low volumes.
- Data which could impact the pair in the week ahead are Australia retail sales and GDP and U.S. nonfarm payrolls on Friday.
Recommendation: Good to sell rallies around 0.7165/75, SL: 0.7250, TP: 0.7110/0.7045
