AUDUSD Poised For Major Rally As Bulls Remain in Control

Technical Bias: Bullish

Key Takeaways:

• AUDUSD leaves a classic bullish engulfing pattern
• Aussie retail sales missed expectations
• 0.7551 remains key support area

The Australian Dollar (AUD) extended upside movement against the US Dollar (USD) on Wednesday, increasing the price of AUDUSD to more than 0.7950 following the release of some key economic reports. The technical bias remains bullish due to a Higher High and Higher Low in the recent wave.

Technical Analysis

As of this writing, the pair is being traded near 0.7967. A hurdle may be noted around 0.8004, the 61.8% fib level ahead of 0.8071, the high of the bearish pin bar as demonstrated in the following daily chart. The technical bias remains bullish as long as the 0.7551 support area is intact.

On the downside, the pair is likely to find a support around 0.7914, the 50% fib level ahead of 0.7823, the 38.2% fib level and then 0.7531, the low of the last major dip. The pair left a classic bullish engulfing candle yesterday which shows strong bullish sentiment in short to medium term.

Australian Retail Sales

On Forex Calendar, the retail sales in Australia remained 0.3% in March as compared to 0.7% in the month before, down beating the average forecast of 0.4%, a government report said today. Generally speaking, higher retail sales figure is considered positive for the economy thus a worse than expected actual outcome might incite short term bearish pressure in the price of AUDUSD.

Trade Idea

Considering the overall technical and fundamental outlook, buying 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 below the 0.7786 support area.