AUDUSD Poised for Downside Reversal After Home Loans Report

The Australian Dollar (AUD) inched lower against the US Dollar (USD) on Friday, decreasing the price of AUDUSD to less than 0.7550 following some key economic releases. The technical bias shall remain bullish because of a higher high in the recent upside move.

Technical Analysis

As of this writing, the pair is being traded around 0.7530. A support can be noted around 0.7470, an immediate trendline support ahead of 0.7400, the psychological number and then 0.7389, another trendline support as demonstrated with pink color in the given below chart.

On the upside, a hurdle can be noted near 0.7559, an immediate trendline resistance level ahead of 0.7588, the 61.8% fib level as demonstrated in the given above chart and then 0.7600, a key psychological level.  A break and daily closing above the 0.7600 resistance shall incite renewed buying interest, validating a move towards the 0.7720 resistance zone. The technical bias shall remain bearish as long as the 0.7600 resistance area is intact.

Australia Home Loans

Home financing in Australia declined in April for a third straight month, government data showed Friday. The number of home loans issued by Australian authorities fell by a seasonally adjusted 1.9% in April, following a revised 0.9% drop the previous month, the national statistics bureau said in a report on Monday. Analysts in a median estimate called for a decline 0.9%. Investment lending for homes, a gauge of fixed residential property loans, dropped 2.3% from March. This component rose 0.8% the previous month.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair around current levels may be a good strategy in short to medium term.'
Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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