The Australian Dollar (AUD) retreated off the open against the Euro to hit resistance at 0.6725 (1.4870) before falling back to 0.6695 (1.4940) into Tuesday. Early “risk on” was evident but replaced by uncertainty with the Eurozone inflation printing at 8.1% vs 7.8%- the highest in over a decade with energy and food prices equating for two thirds of the number. This raises questions on how the ECB will delicately raise rates while keeping inflation in check and not causing a disastrous situation of the economy stagnating. The ECB is forecast to raise by 25% at the July meeting. The AUD may be encouraged by today’s GDP first quarter read, predicted to be 0.6% . Analysts have voiced saying this figure may be a little light. A breakthrough 0.6725 (1.4870) could signal an extended run higher from the AUD.
Current Level: 0.6698 (1.4929)
Resistance: 0.6760 (1.5180)
Support: 0.6590 (1.4800)
Last Weeks Range: 0.6581-0.6718 (1.4885-1.5194)