AUDUSD Poised For Upside Rally As Key Support Weighs
FXOpen
Key Takeaways:
- AUDUSD forms a pin bar on hourly chart
- NFP exceeds expectations
- Key trendline support weighs
The Australian Dollar (AUD) extended downside movement against the US Dollar (USD) on Monday, dragging the price of AUDUSD to less than 0.7700 following the US Nonfarm Payrolls Release. The technical bias remains slightly bullish due to a Higher High on the daily chart.
Technical Analysis
As of this writing, the pair is being traded near 0.7695. A support can be seen near 0.7685, the lower trendline channel on daily timeframe as demonstrated in the following chart. A break and daily closing below the trendline could incite renewed selling interest, validating a dip towards the 0.7600 support area.
On the upside, the pair is expected to face a hurdle near 0.7783, the 23.6% fib level ahead of 0.7800, the psychological number and then 0.7911, the swing high of the last major upside rally. The technical bias will remain bullish as long as the 0.7624 support area is intact.
Nonfarm Payrolls
The US corporations added 295K jobs in February as compared to 239K jobs in the month before, surpassing the average forecast of 240K. Generally speaking, higher nonfarm payrolls reading is considered positive for the economy thus a better than expected actual outcome spurred bullish momentum in the US Dollar Index which tracks the strength of greenback against a basket of six major currencies.
Trade Idea
Considering the overall technical and fundamental outlook, buying the pair around the 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 trendline support area as described above.
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