The Australian Dollar (AUD) extended downside movement against the US Dollar (USD) on Wednesday, dragging the price of AUDUSD to less than 0.7425 following the release of some key economic news. The technical bias remains bullish because of a Higher High in the recent upside rally.
Technical Analysis
As of this writing, the pair is being traded near 0.7421. A support may be seen around 0.7385, a key horizontal support area ahead of 0.7327, another horizontal support and then 0.7300, the psychological number.
On the upside, the pair is likely to face a hurdle near 0.7484, the swing high of the recent upside move ahead of 0.7533, a huge horizontal resistance and then 0.7600, the psychological level. The technical bias will remain bullish as long as the 0.6973 support area is intact.
Australia Home Loans
Home loans in Australia fell more than expected in January, indicating that even with record low interest rates some steam may have gone out of the property market. Overall, loans fell 3.9 per cent month-on-month in January, more than the 3 per cent economists were expecting and versus a 2.7 per cent rise in December. That is the steepest fall since last May, when loans fell 8 per cent month-on-month. Home loans growth for rent and resale fell 1.6 per cent month-on-month, versus a 0.1 per cent decline in December.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair around current levels could be a good strategy in short to medium term if we get another bearish candle on the daily chart.
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