The AUD/USD is currently going through a period of correction after dropping under the 0.87 level. The pair has been on an upward trend since yesterday and has so far peaked at the 0.8760 area.
Upcoming events that will be of interest for traders of the pair include NAB's Business Confidence and Business Conditions Report (today, 12:30am GMT), US Durable Goods Orders (today, 1:30pm GMT), and the US Interest Rate Decision (tomorrow, 7:00pm GMT).
In related news, Australia and Japan are set to sign a free trade agreement in July when Japanese Prime Minister Shinzo Abe visits Australia. The primary beneficiary of this agreement would be Australia's agricultural sector.
The AUD/USD pair is currently trading at 0.8735, with initial resistance seen at 0.8737, followed by 0.8759. Meanwhile, initial support is at 0.8619 followed by 0.8598.
It's not just the Reserve Bank of Australia (RBA) that thinks their currency is overvalued. The Reserve Bank of New Zealand (RBNZ) also said the same thing about the kiwi in comparison to the aussie.
The NZD recently reached a 35-year high against the AUD. New Zealand's Finance Minister Bill English called this a cause for concern. He did not comment, however, on the possible impact of an interest rate hike to the NZD's value, saying that it was a matter for the RBNZ governor.
The Finance Minister had this to say:
"It's an increasing headwind for those businesses that are selling into Australia; 95 cents is higher than it's been for a long time. I think 12 months ago it was as low as 80 cents (Australian).
"So it's a bit of a concern, but I would imagine the Australian economy will turn out to be a bit stronger than people would expect and we'd like to see that exchange rate drop back."
While the AUD/NZD pair spent late last week under the 1.0500 area, it has since returned above it in this week's trading mainly due to the strength of the aussie. At the moment the pair is trading at 1.0618, with initial resistance seen at 1.0568, followed by 1.0594. Meanwhile, initial support is at 1.0471, followed by 1.0445.
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