The Aussie Dollar extended upside movement against the greenback on Monday after the appearance of bullish engulfing bar on the daily chart. The overall bias is however still bearish due to a Lower Low on the daily chart.
Technical Analysis
The AUD/USD opened the Asian session at 0.8644. As of this writing, the pair is being traded around 0.8663. The price is likely to face the first resistance around 0.8762, the high of November 5 and trend-line as demonstrated in the following chart. Then the pair might test the next milestone around 0.8850 that acted as resistance on various occasions during last month.
On the downside, the pair may find a support around the 0.8642-0.8650 zone. The next support lies at 0.8550, the psychological number and yesterday’s low. However, a daily closing above 0.8654 will confirm the bullish momentum that might continue over the next couple of days taking the price up to 0.8675, as indicated by the confluence of trendline and 50-day SMA.
Australia Home Loans
This September the Australian home loans remained -0.7%, exceeding 1.0%, the figure for the month before, as released by the Australian Bureau of Statistics. A high reading is considered positive for the Aussie Dollar and vice versa, thus a better than expected actual figure spurred bullish momentum in the price of AUDUSD.
Trading Strategy
Considering the overall technical and fundamental outlook, buying the pair on a daily close above the 0.8650 resistance could be a good strategy in short to medium term. The trade should however be stopped out on a daily closing back below the 0.8650 support area.
