AUDUSD Plunges After Worse than Expected Home Loans Report

Technical Bias: Bullish

Key Takeaways:

• AUDUSD falls as home loans data disappoints
• Near term bias remains bullish
• Selling near current levels look good

The Australian Dollar (AUD) extended downside movement against the US Dollar (USD) on Friday, dragging the price of AUDUSD to less than 0.7700. The technical bias remains bullish in short term due to consistent Higher Highs in the recent upward rallies on small timeframes.

Technical Analysis

As of this writing, the pair is being traded near 0.7688. A hurdle can be seen around 0.7700, the psychological number ahead of 0.7737, the high of the last upward rally as demonstrated in the following chart.

On the downside, the pair is expected to find a support near 0.7658, the low of the last dip on hourly timeframe ahead of 0.7532, the low of the last major correction on daily chart. The technical bias will remain bullish as long as the 0.7532 support area is intact.

Australia Home Loans

Home loans in Australia fell down sharply by 1.2% in February as compared to -1.7% in the month before, down beating the average forecast of 3.0%. Generally speaking, higher home loans are considered positive for the economy thus a worse than expected actual outcome increased selling pressure in the price of AUDUSD, opening doors for more dips below the 0.7500 handle.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair around current levels appears to be a good strategy in short to medium term. The trade should however be stopped out on a daily closing above the 0.7737 resistance area.