AUD/USD: range-bound between 0.7500-0.7600, or bears to fill the gap first?

AUD/USD rallied in early Asia, making for a bullish gap on broad dollar weakness. 0.7567 has been the high so far, from a low of 0.7544. Markets should be less active in Asia with Singapore, HK and China out. 

Last week, the US GDP Q4 initial readings were somewhat disappointing, although most of the miss was attributable to net exports where 1.7ppts were subtracted from growth. More here on that in a review from the analysts at Westpac. Economic Wrap: GDP Q4 was a miss - Westpac

AUD/USD 1-3 month: 

The same analysts at bearish on AUD/USD longer term, down to 0.7400, but sight the price to remains consolidated for the day ahead between 0.7500-0.7600 . 

"The US dollar’s impressive post-election rally may have paused, but still has potential to rise further during the months ahead. The Fed’s assertive tightening bias plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar. Against that coal and iron ore are likely to sustain a good portion of their dramatic rises, and economic data for Q4 and Q1 should improve, but these forces are subservient to the US dollar’s trend. Australia’s AAA rating will remain an issue into the May budget."

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AUD/USD levels

Analysts at Brown Brothers Harriman explained that through the start of last week, the Australian dollar had gained about 4.5 cents (~6.25%). "The pullback, partly spurred by the slightly softer than expected Q4 CPI has been modest; limited to about one cent (~$0.7500).  While there may be another attempt on the $0.7600, we expect it to fall short and see the underlying technical tone as fragile," argued the analysts, adding,  "The initial retracement target is near $0.7440, which is near the 20-day moving average. Economic reports showing a deterioration of its trade balance and that building approvals faded in December could fan expectations of a more dovish tone from the RBA when it meets on February 6."