The Australian Dollar (AUD) rallied against the US Dollar (USD) on Monday during the Asian session, increasing the price of AUDUSD to more than 0.7180 following the release of some key economic data. The technical bias however remains bearish because of a Lower High (LH) in the recent upside rally.
Technical Analysis
As of this writing the pair is being traded around 0.7189. A hurdle may be noted near 0.7268, the 76.4% fib level ahead of 0.7281, the swing high of the last major upside rally as demonstrated in the following daily chart.
On the downside, the pair is expected to find a support around 0.7142, the 50% fib level ahead of 0.7085, the 61.8% fib level and then 0.7000, a huge psychological support.
Private Sector Credit
The growth rate in the value of loans outstanding to the private sector has come in ahead of expectations in October, according to data from the Reserve Bank of Australia. The RBA’s financial aggregates show total credit increased 0.7 per cent for the month, the same as the downwardly revised 0.7 per cent in September. The result was ahead of forecasts by analysts surveyed by Bloomberg, who had tipped a 0.6 per cent gain. Over the 12 months to October total credit growth came in at 6.7 per cent, an increase on the 5.7 per cent rise in the previous year. The annual result also pipped expectations, after analysts surveyed by Bloomberg tipped a gain of 6.6 per cent.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair on rallies could be a good strategy in short to medium term.
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