- AUD/USD breaks major resistance at 0.7685 and extends gains to take out the 0.77 handle.
- Upside in the pair seems to gain momentum as we head into RBA rate decision due at 0430 GMT today.
- Aussie bulls continue to cheer upbeat Australian building approvals data, which staged a solid rebound in March.
- Building consents rose 3.7% m/m in March, following a revised 3.1% increase in February, and coming in much better than the forecast of a 1.8% decline.
- Broad US dollar weakness across the board in light of a recovery in commodities also supporting upside in the pair.
- Very low inflation number had raised the odds of a rate cut, but an overall positive business environment exacerbates the dilemma for the RBA.
- Markets are pricing in a strong chance of a cut (circa 60%). Either way, a sharp response from the AUD is assured.
- Technically the pair is poised for upside. It has broken major trendline resistance at 0.7685 and is holding above 0.77 handle.
- Immediate resistance and support are seen at 0.7716 (April 13th highs) and 0.7687 (10-DMA). We see weakness on breaks below 0.7680 levels.
Recommendation: Good to buy dips around 0.77 levels, SL: 0.7670, TP: 0.7730/0.7760/0.7775
