The Aussie Dollar (AUD) extended upside movement against the US Dollar (USD) on Wednesday, increasing the price of AUDUSD to more than 0.7065 following the release of consumer confidence report. The technical bias already remains bullish because of a Higher High in the recent upside rally.
Technical Analysis
The Australian dollar followed the EUR in its intraday decline yesterday, weighed also by a fall in gold prices, which are pressuring last Friday’s multi-month lows.
In recent weeks, the pair has suffered declines, but in the short term at least, we could experience a move to bullish sentiment. This is highlighted by the MACD posting higher highs and lows on the 4-hour and daily charts. At the same time, price action is posting lower lows, which should indicate that spot has bottomed out for the time being.
Australia Consumer Confidence
A measure of Australian consumer sentiment jumped to a six-month high in November as people became markedly more optimistic on the economic outlook, another sign that further cuts in interest rates might not be needed. The survey of 1,200 people by the Melbourne Institute and Westpac Bank showed its index of consumer sentiment rose a seasonally adjusted 3.9 percent in November.
The index has been volatile recently, with steep increases in August and October sandwiching a sharp fall in September. The index reading of 101.7 was 5.3 percent higher than in November last year and showed optimists finally outnumbering pessimists.
Trade Idea
Considering the overall technical and fundamental outlook, buying the pair around current levels appears to be a good strategy if we get a valid bullish reversal candle on the daily chart.
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