AUDUSD: Support at 0.7670/0.7595, resistance at 0.7740/0.7800

Markets remain cautious/sensitive on Greece, which is moving ever closer to Friday’s deadline for the €300m repayment without a deal in place that would allow the debt to be paid. In addition to this, markets are also mindful of the importance of the economic announcements, as we looking towards a batch of key tier one economic data points that are due this week. This data driven uncertainty helped to pull markets around yesterday afternoon and can be expected to continue again today. Strip it back though, the improvement in the ISM manufacturing data has fuelled the expectation of a Fed rate hike, even though FOMC members Rosengren (non voting dove) and Fischer (voting moderate dove) were rather dovish in comments. The dollar has made further ground although equity markets have stalled, whilst gold has consolidated. Wall Street closed just 0.2% higher, whilst Asian markets were cautious overnight with the Nikkei 0.1% lower. European markets are mildly higher but with a lack of real conviction behind them. In forex trading there is sense of consolidation amongst the major pairs. The big mover has been the Aussie dollar which is strongly higher. In the past few hours the Reserve Bank of Australia kept rates on hold at 2.0% (as expected), however it failed to strike a sufficiently dovish tone which has led to a rally of over 75 pips on the day.
Traders will be looking out for the UK construction PMI data at 0930BST. Although it only comprises around 7% of the UK economy the sector has been a drag on UK growth and signs of a decent pick up would be welcomed by traders, expectation is for a reading of 55.0. Then at 1000BST the Eurozone flash CPI data for May is released. The German flash data continued a surprise uptick which beat expectations yesterday, which could help to push inflation back to positive for the Eurozone to the expected +0.2%. There is also the US Factory Orders at 1500BST which is seen as an important component in the building of the US economic recovery. An expectation that there will be zero growth on the month is unlikely to enthuse the dollar traders too much, following 2.1% growth last month.