The Australian Dollar (AUD) extended downside movement against the US Dollar (USD) on Monday, for the sixth day in a row, dragging the price of AUDUSD to less than 0.6850 as bears gain strength following the release of US nonfarm payrolls report. The technical bias will remain bearish because of a Lower Low in the ongoing downside move.
Technical Analysis
As of this writing, the pair is being traded around 0.6970. A hurdle may be noted near 0.7000-0.7015, the confluence of psychological number, 76.4% fib level and horizontal resistance ahead of 0.7085, the 61.8% fib level as demonstrated in the following daily chart.
On the downside, the pair is expected to find a support around 0.6900, the psychological number. A break and daily closing below the 0.6900 support area could open doors towards the 0.6000 region in the long run which is the low of year 2008. The technical bias will remain bearish as long as the 0.7326 resistance area is intact.
Nonfarm Payrolls
Nonfarm payrolls grew by 292,000 during December, according to a Bureau of Labor Statistics report Friday that showed employment momentum as the year wound down. The unemployment rate was 5 percent. A separate, more encompassing measure that accounts for those who did not look for work in the past month or were working part time for economic reasons — the underemployed — head steady as well, at 9.9 percent. Economists had been expecting 200,000 new positions and the unemployment rate to hold steady.
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 if we get a valid bullish reversal candle on the daily or four-hour timeframe.
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