AUD/USD: small pip opportunities on 0.74 handle, busy US schedule this week

 Currently, AUD/USD is trading at 0.7443, down -0.04% on the day, having posted a daily high at 0.7452 and low at 0.7427.

AUD/USD has been confined to a tight holiday range today albeit with small pip round-turn day trading opportunities. The broader tone persists overall and we wait for the week to get going with plenty of event risk from the US this week. The nonfarm payrolls at the end of the week could well decide the fate of the dollar for the near term ahead of next month's Fed decision.

Bill Evans, Chief Economist at Westpac is bearish on the Aussie longer term. "Our scenario around FED rate policy in 2017 and 2018, will see US short-term rates exceed Australian rates by the second half of 2018. Coupled with our expectation for falling commodity prices as China slows through 2018, and low-cost producers including Australia lift production, prospects for the AUD appear bleak with our end of 2018 target at USD0.65."

AUD/USD levels

Slobodan Drvenica, an analyst at Windsor Brokers Ltd, noted that AUD/USD remains above Friday’s low at 0.7421, which also marks 50% retracement of 0.7328/0.7517 recovery leg. "Bearish setup of daily studies maintains downside risk with a firm break below 20SMA to trigger fresh extension lower and expose next pivotal support at 0.7400 (Fibo 61.8% of 0.7328/0.7517)."

Meanwhile, Jim Langlands at FX Charts argues that the daily charts still look mildly constructive," Above Friday’s high we might expect a run back towards minor resistance at 0.7480 and at 0.7500 ahead of the 23 May high of 0.7517. Above here would then look for a run towards 0.7540/45 and eventually to 0.7555 although that remains remote."