The Australian Dollar (AUD) inched lower against the US Dollar (USD), dragging the price of AUDUSD to less than 0.7350 following the release of Australia’s trade balance news. The technical bias remains bearish because of a lower low in the recent downside move.
As of this writing, the pair is being traded around 0.7319. A support can be seen around 0.7300, the psychological number ahead of 0.7159, the swing low of the last major downside move as demonstrated in the given below daily chart. A break and daily closing below the 0.7159 shall incite renewed selling interest, validating a move towards the 0.7000 support area.
On the upside, the pair is expected to face a hurdle near 0.7332, the horizontal resistance area ahead of 0.7456, another critical resistance area and then 0.7500, the psychological number. The technical bias shall remain bearish as long the 0.7498 resistance area is intact.
Australia’s Trade Balance
Australia’s trade balance improved by $2,362 million to a surplus of $1,243 million in November. It was the first monthly trade surplus in 33 months. The rolling 12-month deficit improved from $28.6 billion to $23.8 billion (smallest deficit in 18 months).
Australia’s rolling annual trade surplus with China hit a 15-month high of $16.2 billion in November although still well down from the record high of $42.8 billion set in April 2014.
Air traffic: In October the number of passengers on the Sydney-Melbourne route was up by 1.1 per cent on a year ago to a record 775,717. The Sydney-Melbourne route is one of the busiest air routes in the world. The Sydney-Melbourne route is also a key measure of business activity. On all domestic flights passenger traffic rose in October compared with a year ago but the number of flights fell so the smoothed load factor lifted to 4-year highs.
Considering the overall technical and fundamental outlook, selling the pair around current levels appears to be a good strategy in short to medium term.
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