AUD/USD supported at 0.7640 ahead of RBA

• The Reserve Bank of Australia is widely expected to keep rates on hold at 1.5%, however, a hawkish surprise could see the AUD/USD extend further.
• AUD/USD is trading near 6-week's high as AUD Retail sales, copper, US stock indices and a lukewarm USD boost the antipodean currency pair. 

AUD/USD surged more than 110 pips reaching an intraday high at 0.7668 reaching there a six-week high. It is now at around 0.7645 up 0.99% on the first day of the week.

The Aussie gained positive traction throughout the day as macroeconomic data from Australia gave a positive sentiment on the currency. The Retail Sales for April came above expectations at 0.4% versus the 0.2% expected by analysts. 

The commodity-linked currency AUD was underpinned by rising copper prices and to a certain extent also gold which had an intraday pop to the $1298.00 a troy ounce. Additionally, US stock indices which are positively correlated to AUD are having a bull run on Monday further bolstering the pair.

The Asian and first part of the European session were characterized by USD weakness across the board, which also helped AUD/USD gain some strength. However, as the US session started, the greenback recovered its poise, trading back above the 94.00 mark. 

Investors will shift their attention to the Reserve Bank of Australia Rate Statement (RBA) at 4:30 GMT. The RBA is widely expected to keep interest rates unchanged. In fact, Westpac Bank “continues to expect the RBA to leave the cash rate unchanged at 1.50% throughout 2018 and 2019.” For the RBA preview click here.

AUD/USD 4-hour chart 

AUD/USD broke above the 50-period simple moving average on the daily chart suggesting a rather strong bullish momentum. Immediate resistance is seen near the high of the day at 0.7668  followed by the 0.7700 handle. To the downside investors may expect support near the 0.7605, May 22 high followed by 0.7510 June 1, low. After the sharp move higher it can be reasonable to expect some consolidation.