Technical Bias: Bearish
Key Takeaways
- Australian dollar struggled to hold ground against the US dollar, as the market looks past employment report.
- Australian home loans report came as a relief for buyers.
- AUDUSD support seen at 0.9370 and resistance ahead at 0.9405.
The US dollar gained heavily against the Australian dollar recently, as the AUDUSD pair broke an important support area to encourage sellers in the short term.
Technical Analysis
AUDUSD rose yesterday, easing some by the end of the US session on recovering Australian dollar. Earlier, the pair extended down to 0.9363 where it found the 200 simple moving average on the 4 hour timeframe, which held the downside in the pair. The 4 hours chart shows indicators correcting higher from somewhat oversold readings, but price seems unable to follow, as it looks shallow and corrective in nature. It is important to note that there was a bullish trend line that acted as a catalyst for the pair many times, which was breached earlier sduring this week. Currently, the mentioned trend line is acting as a resistance for the pair and it might continue to do so. On the downside, the 200 SMA (4 hours) is holding the downside along with a short-term bullish trend line. This looks like a consolidation pattern, which might give its way for more losses in the near term.
On the upside, an immediate resistance can be seen around a critical confluence area of 100 and 50 SMA (4 hours), which is also coinciding with the 38.2% Fibonacci retracement level of the last drop from the 0.9459 high to 0.9363 low.
Australian Home Sales Data
The Australian home loans report was published by the Australian Bureau of Statistics earlier during the Asian session. The Forecast was slated for a 1% decline in the home loans. However, the outcome was somewhat better than expected, as it registered a reading of 0%. Moreover, the report mentioned that investment housing commitments rose 0.3% and owner occupied housing commitments rose 0.2% in May 2014.
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