AUDUSD Continues Losing Streak As Bears Remain in Control

The Australian Dollar (AUD) extended downside movement against the US Dollar (USD) on Friday, dragging the price of AUDUSD to less than 0.7325 as bears seem to gain momentum. The technical bias has already turned bearish because of a Lower Low in the ongoing downside wave.

Technical Analysis

As of this writing, the pair is being traded near 0.7304. A support may be noted around 0.7275, a key horizontal support level ahead of 0.7242, another major horizontal support as demonstrated in the following daily chart.

On the upside, the pair is likely to face a hurdle near 0.7382, a key horizontal resistance level ahead of 0.7500, the psychological number. The technical bias will remain bearish as long as the 0.7718 resistance area is intact.

Initial Jobless Claims

Initial jobless claims jumped much more than expected last week, by 20,000 to 294,000. That’s the highest level for claims since the week of February 28, 2015. Economists had forecast that first-time filings for jobless claims totaled 270,000, according to Bloomberg. The four-week moving average of claims, which evens out the weekly volatility, jumped by 10,250 to 268,250, around where it was mid-February. Overall, the spike is no reason to be alarmed about the labor market. Initial claims have not crossed the 300,000 mark for 62 straight weeks.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair on every short term bounce still appears to be a good strategy.

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Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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