Global macro overview for 03/07/2015 - AUDUSD extends drop

After May retail sales data release published last night (-0.1% m/m; 4.1% y/y expected vs. 0.3% m/m; 4.7% y/y reading), the aussie was pushed lower towards the level of 0.7500, the lowest level in 6 years. It was the third day when the currency has been moving downwards and the fuel to the fire was added by even more disappointing iron ore prices drop as well. As AUD is a commodity currency that is very susceptible for iron ore prices, the negative trend looks to be sustained for some more time. Today's market volume is expected to be muted, due to Independence Day in the US, so market sentiment will be mostly driven by next week RBA meeting (cash rate decision is due on Tuesday and labor data is due on Thursday).

Current AUD/USD situation: The decline towards the level of 0.7500 is in progress and if this level is violated, next weekly technical support is seen at the level of 0.7266.