The Australian Dollar (AUD) extended downside movement against The US Dollar (USD) on Friday, dragging the price of AUDUSD to less than 0.7420 following the release of some key economic news from the United States. The technical bias remains bullish because of a Higher High and Higher Low in the recent wave on the daily chart.
Technical Analysis
As of this writing, the pair is being traded near 0.7412. A major support is being noted around 0.7383, the horizontal support area ahead of 0.7327, another major horizontal support as demonstrated in the following chart.
On the upside, the pair is likely to face a hurdle near 0.7504, the intraday high of yesterday ahead of 0.7680, the horizontal resistance and then 0.7700, the psychological number. The technical bias will remain bullish as long as the 0.7145 support area is intact.
US Jobless Claims
Applications to collect unemployment insurance dropped by 4,000 to 264,000 in the period ended June 4, Labor Department data showed on Thursday. The median forecast in a Bloomberg survey called for 270,000. Continuing claims decreased to 2.1 million in the previous week, the lowest since October 2000. The report indicates companies remain reluctant to reduce headcounts even after figures last week showed May was the worst month for hiring in almost six years. Federal Reserve Chair Janet Yellen, who called the payrolls slowdown “concerning,” nonetheless pointed to claims as one of the more positive and timely indicators of the labor market.
Trade Idea
Considering the overall technical and fundamental outlook, buying the pair near the above mentioned support levels could be a good strategy in short to medium term.
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