The Australian Dollar (AUD) extended downside movement against the US Dollar (USD) on Friday, dragging the price of AUDUSD to less than even 0.7720 after the release of some key economic news. The technical bias already remains bearish due to a Lower High in the recent upside rally on hourly timeframe.
Technical Analysis
As of this this writing, the pair is being traded near 0.7717. A support may be noted around 0.7707, the low of Wednesday ahead of 0.7700, the confluence of 23.6% fib level as well as psychological number as demonstrated in the following hourly timeframe.
On the upside, the pair is expected to face a hurdle near 0.7714, the 38.2% fib level ahead of 0.7724, the 50% fib level and then 0.7751, the high of the last upside rally on hourly time frame.
Markit Services PMI
Markit Economics released the US Services sector’s Purchasing Managers Index (PMI) report on Thursday. The services sector grew with 54.8 points, well below the median projection of 56.7 points as compared to 56.2 in the last observation. The worse than expected actual outcome spurred bullish momentum in AUDUSD yesterday but the pair engulfed into selling pressure today amid weak fundamental outlook.
Trade Idea
Considering the overall technical and fundamental outlook, buying the pair could be a good strategy if we get a bullish pin bar or bullish engulfing candle around current levels on daily chart. It is always recommended to use proper risk and reward ratios if you want to optimize your profitability in forex trading. You may find more details about money management on diferent forex forums.
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