After starting the week with a somewhat upbeat tone, the AUD fell sharply against the USD in today's trading. This after disappointing economic data came out from Australia. Its YoY GDP fell from 3.1% to 2.5%, against initial expectations of a drop to just 2.7%. Its QoQ GDP figure wasn't impressive either, as it remained at 0.6%, slightly below expectations of a rise to 0.8%.
Yesterday, the Reserve Bank also announced no change to its cash rate, which remains at 2.75%. RBA Governor Glenn Stevens mentioned in his statement that the aussie remained "high considering the decline in export prices that has taken place over the past year and a half." This echoed the same statement he made during the last interest rate decision.
The AUD/USD pair is currently trading at around 0.959, well below highs of under 0.980 during Monday's US session. Initial resistance for the pair is seen at 0.9711, followed by 0.9736. Meanwhile, initial support is at 0.9548, followed by 0.9524.
As for the EUR/USD pair, it is currently on an uptrend, as it trades at around 1.3075. However, it still continues to struggle to breach the 1.31 mark.
Volatility is expected from the two currencies as important economic data are coming from both the US and the Eurozone. At 9:00AM GMT, Europe's QoQ and YoY GDPs will be released. The QoQ figure is seen to rise slightly from -0.6% to -0.2%, while its YoY figure is expected to drop one notch from -0.9% to -1.0%. On Thursday, the ECB will also announce its interest rate decision, which is expected to remain at 0.5%.
On Friday, the US will cap the week's trading with several important numbers, including May's Nonfarm payrolls and Unemployment rate. The NFP is seen to rise slightly from 165K to 168K, while the unemployment rate is expected to stay at 7.5%.
Initial resistance for the EUR/USD is seen at 1.3122, followed by 1.3155. Meanwhile, initial support is at 1.3062, followed by 1.3029.
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