AUD/USD: relentless; targeting 0.7650?

AUD/USD initially recovered from its rating outlook downgrade by the S&P from stable to negative, rallying to July highs of 0.7571, currently trading at 0.7562.

AUD/USD dropped to 0.7470 on the nonfarm payrolls data last week that surprised markets when the headline rose 287k in June, which was the largest monthly increase since October 2015 and well above consensus at +180k. However, the rally in the dollar was short-lived  and the Aussie kept running higher. However, it opens today a little soft, despite the weekend news that the coalition declared victory, but needs independents to form a majority government. Chinese CPI was also soft. CPI and PPI came in at 1.9% y/y and -2.6% y/y, respectively." 

"China reports June trade Wednesday, with exports expected at -5.0% y/y and imports at -6.2% y/y.  June IP and retail sales will be reported Friday, with the former expected to rise 5.9% y/y and the latter to rise 9.9% y/y.  Q2 GDP will also be reported, with growth expected at 6.6% y/y vs. 6.7% in Q1.," noted analysts at Brown Brothers Harriman.

AUD/USD levels

AUD/USD  is en route to break 0.7575 resistance with the next major target at 0.7650. Analysts at Westpac offered a 1-3 month outlook. "The uncertainty generated by Brexit plus further RBA easing should be negative for the AUD. We target sub-0.72." The 200 dma is located at 0.7303 and a break of the 0.72 handle, the May low stands at 0.7148.