AUDUSD Plunges as Bears Gain Strength

The Australian Dollar (AUD) inched lower against the US Dollar (USD) on Monday, decreasing the price of AUDUSD to less than 0.7850 following some key economic releases. The technical bias shall remain bullish because of a higher high in the ongoing upside move.

AUD/USD Technical Analysis

As of this writing, the pair is being traded around 0.7820. A hurdle can be noted near 0.8024, an immediate horizontal resistance level ahead of 0.8100, the psychological level and then 0.8249, the high of the last major upside rally as demonstrated in the given below chart.

On the downside, a support can be noted around 0.7800, an immediate horizontal support ahead of 0.7750 the psychological number and then 0.7667, another key horizontal support as demonstrated in the given above chart. The technical bias shall remain bullish as long as the 0.7667 support area is intact.

US Inflation

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, edged up 0.1 percent last month also likely as unseasonably mild temperatures in some parts of the country reduced demand for utilities.

The gain, which followed a 0.3 percent increase in July, was in line with economists’ expectations. The government said the data reflected the effects of Hurricane Harvey.

However, it could not separately quantify the total impact of Harvey on the data. The government made adjustments to estimates where source data were not yet available or did not fully reflect the effects of the storm.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair around current levels may be a good strategy in short to medium term.

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