Last week, was the first time in many months that risk assets show some signs of weakness.

For the most part, we’ve seen a staggering v-shaped rally off the lows and it has been the AUD/USD that has been a real leader.

The Aussie has bounced off lows of 0.5500 and rose as high as 0.7000 before the sellers decided it was time to take some risk off the table again. The price action was very similar in the likes of the SPX and the NASDAQ, who both saw big falls last week, with a slight rebound into the close on Friday. The new week has opened with a few wobbles though.

Looking to the week ahead, there are two key data releases that will impact the AUD/USD in a big way.

The first is the monthly jobs data which is expected to improve on last month with 75,000 jobs lost in May – an improvement on the 594,300 jobs that were lost in April. At the same time, the unemployment rate could lift back to 7%, which is the very thing the RBA are not too happy about.

Then on Friday, we. will also see the recovery start to happen after the damage from lockdown measure to the retail sector with the experts forecasting a strong rebound of 13 per cent.

While these numbers are showing improvement, it is clear that the economy is not out of the woods.

With the big rebound in risk assets, I think this is the obvious point for a consolidation and pullback. 0.7000 will likely be a clear line in the sand and as we can see on the charts, there is already a lower high under 0.6900 which is a bearish sign. If the lows at 0.6800 drop, there is no much support until the 0.6500-0.6600 and if US equities fall this week, those levels are a real possibility.