The Australian Dollar (AUD) extended last week’s gains against the US Dollar (USD) clocking 0.7202 before dropping back. US Fed hike predictions have been revised lower following a poor read in the first quarter GDP release which came in at -1.5% vs -1.3%. Analysts now predict the Fed will hike rates this year to 2.5%-2.75% through to December lower than earlier initial numbers of 2.75% -3.0%. The first quarter GDP is the first in 5 quarters to contract suggesting alarming predictions of upcoming trade deficit numbers. Non-Farm Payroll Friday is expected to show improving unemployment (3.5%) and moderate jobs results for May. We see stiff resistance at 0.7220 suggesting a pullback could be in order.
Current Level: 0.7191
Resistance: 0.7220
Support: 0.7070
Last Weeks Range: 0.7035-0.7164