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The Aussie extended upside movement against the greenback on Thursday taking the price of the pair to more than 0.8750 ahead of the US jobless claims data.
As of this writing the pair is being traded around 0.8753. Today the pair breached an important resistance level at 0.8760 but even then is being dragged down by the bears. Currently, the pair is struggling around 0.8755 to take the price higher, testing the resistance at 0.8760. If the pair succeeds in breaching this resistance, it will move forward to test the next critical resistance area around 0.8800, the psychological number and 50-Day SMA. The said level stalled the bullish wave on many events during the last month.
On the downside, the pair may find the support around 0.8680, the psychological number and 38.2% Fib level. The next support level lies subsequently around 0.8626 and 0.8539.
The overall bias is bearish because of lower highs on the daily chart. However, the market anticipates a bullish breakout on a daily close above the trend line resistance at 0.8765.
Consumer Inflation Expectation
The consumer inflation expectations remains 4.1% for this October as opposed to 3.4% of the month before. Released by the Melbourne Institute, the high reading is considered positive for the Aussie Dollar and vice versa, thus a better than previous figure spurred bullish momentum in the price of AUD/USD.
Initial Jobless Claims
The initial jobless claims remained 280K for the month of October as compared to 278K for the month before, average forecast of different analysts says. As an indicator of strength in the labor market, a high reading is considered bearish for the US dollar. Thus a worse than expected figure might produce buying pressure in the price of AUD/USD.
Trade idea
Considering the overall technical and fundamental analysis, selling the pair around the 0.8900 handle could be a good option if the pair leaves a bearish pin bar or bearish engulfing candle on the daily chart.
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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
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