The Australian Dollar (AUD) extended downside movement against the US Dollar (USD) on Friday, dragging the price of AUDUSD to less than even 0.8060. The technical bias remains bullish due to a Higher High and Higher Low in the recent daily wave.
As of this writing, the pair is being traded near 0.8058. A hurdle may be noted around 0.8100-0.8107, the confluence of psychological number as well as 76.4% fib level ahead of 0.8162, the high of the last major upside rally as demonstrated in the following daily chart.
On the downside, the pair is likely to find support around 0.7997-0.8000, the confluence of psychological number as well as 61.8% fib level ahead of 0.7908, the 50% fib level. The technical bias will remain bullish as long as the 0.7786 support area is intact.
US Industrial Production
Board of Governors of the Federal Reserve is due to release the industrial production report of the United States today during the early New York session. According to the median projection of different economists, industrial production in the US remained 0.1% in April as compared to -0.6% in the month before. Generally speaking, a higher industrial production figure is considered positive for the economy thus a better than expected actual outcome will be seen as bearish for AUDUSD and vice versa.
Considering the overall technical and fundamental outlook, selling the pair around current levels appears to be a good strategy as we got a bearish pin bar yesterday. The trade should, however, be stopped out if we get a daily closing above yesterday’s high. It is always recommended to use proper risk & reward ratio to optimize your profitability.