AUD/USD - mildly bid, peeps above 23.6% Fib after MYEFO release

AUD/USD regained the bid tone and moved above 0.7648 (23.6% Fib R of Sep/Dec sell-off) following the release of Australia Mid-Year Economic and Fiscal Outlook (MYEFO). 

As of writing, the pair is trading at 0.7650; up marginally compared to Friday's close of 0.7640. As per MYEFO, Australia's real GDP is seen rising as the drag from the mining investment is falling. 

Real GDP is forecast to grow by 2½ percent in 2017-18 and 3 percent in 2018-19, compared to 2.0 percent achieved in 2016-17 and Budget forecasts of 2¾ percent and 3 percent for 2017-18 and 2018-19 respectively. Meanwhile, Nominal GDP is forecast to grow by 3½ percent in 2017-18 and 4 percent in 2018-19. Also, growth in consumption is expected to pick up over the forecast period in response to strengthening labor market conditions.

Elsewhere, China house price index dropped to 5.1 percent in November from 5.4 percent in October.  

Ahead in the day, the US tax reform optimism could weigh over the AU-US yield spread and thus cap the upside in the AUD/USD pair. Bill Evans, Chief Economist at Westpac, says a sustained period of negative Australian vs US rate spreads, could yield a move down to USD 0.68 in 2019, with downside risks. 

AUD/USD Technical Levels

Jim Langlands from FX Charts writes, "the short-term indicators are now pointing lower, and a run back towards 0.7620/30 would not surprise, below which would allow a run back to 0.7600 and possibly to 0.7575/80. The dailies still currently look positive but as I said previously, now that US rates are at parity with Australian rates I do not really think that the Aud has too much upside from here, and I would be looking for levels to sell into strength.

Resistance today lies at 0.7665/70

Sell AudUsd @ 0.7670. SL @ 0.7705, TP @ 0.7580