Technical Bias: Bullish
Key Takeaways
“¢ Australian dollar failed to overtake the 0.9500 resistance level against the US dollar.
“¢ AUDUSD pair is under correction from the Intraday high of 0.9804.
“¢ AUDUSD support seen at 0.9430 and resistance ahead at 0.9510.
The US dollar continued to fall against the Australian dollar yesterday post disappointing ISM manufacturing PMI. However, softer-than-expected Australian trade balance data has ignited a short-term correction in the AUDUSD pair.
Technical Analysis
There is a monster bullish trend line on the hourly timeframe for the AUDUSD pair, which has the held the downside in the pair on numerous occasions. There is one more bearish trend line forming, which acted as a barrier for the pair around the 0.9500 resistance zone. The pair looks like is currently under retracement, and flirting with the 23.6% Fibonacci retracement level of the last bull wave from the 0.9350 low to the recent 0.9504 high. It is very likely that the pair might break the mentioned fib level and trade towards the 50% Fibonacci retracement level where buyers could reappear. However, the most important support can be seen around the 61.8% fib level, which is a critical confluence support area of trend line, 100 hourly simple moving average (SMA) and 200 hourly SMA. So, buyers might find it very tough to break the mentioned confluence support area.
Looking at the present price action, there is a high probability that the pair might correct lower from the current levels. If it manages to climb higher, then the recent high of 0.9504 might act as a resistance for the pair followed by the bearish trend line.
There is a trend line on the RSI as well, which might also act as a catalyst for the pair, and could provide one more reason for the Aussie buyers to take it higher.
Australian Trade Balance Data
Earlier during the Asian session, the Australian Bureau of Statistics released trade balance data for the Australia. The outcome missed the forecast, as the report mentioned that the balance on goods and services was a deficit of $1,911m in May 2014, an increase of $1,131m (145%) on the deficit in April 2014, in seasonally adjusted terms.
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