Has Aussie Dollar Finally Bottomed?

The Australian Dollar (AUD) extended upside movement against the US Dollar (USD) on Wednesday, increasing the price of AUDUSD to more than 0.7249, following the release of some key economic news from the United States. The technical bias remains bullish because of a Higher High in the recent upside rally on the daily chart.

Technical Analysis

As of this writing, the pair is being traded near 0.7243. A resistance may be noted around 0.7266, the intraday high of yesterday ahead of 0.7300, the psychological number and then 0.7383, a major horizontal resistance area as demonstrated in the following daily chart.

On the downside, the pair is likely to find a support around 0.7180, the intraday low of yesterday ahead of 0.7141, the swing low of the recent downside move and then 0.7018, a major horizontal support area. The technical bias will remain bullish as long as the 0.6828 support area is intact.

US Consumer Confidence

Gauges of the U.S. consumer confidence are sending mixed signals, fostering uncertainty about whether the recent pickup in consumer spending will be sustained into the summer months. The Conference Board’s consumer-confidence index fell to 92.6 in May from an upwardly revised 94.7 in April, the group said Tuesday. It was the second consecutive monthly decline and took the index to its lowest level in six months. Economists surveyed by The Wall Street Journal had expected a May reading of 96.0. A separate measure of the U.S. household optimism, however, rebounded in May. The University of Michigan on Friday said its consumer-sentiment index was 94.7 in May, an 11-month high and up sharply from an April reading of 89.0.

Trade Idea

Considering the overall technical and fundamental outlook, buying the pair around the current levels could be a good strategy in short to medium term.

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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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