AUDUSD Looks Set For Major Bullish Reversal

The Australian Dollar (AUD) extended upside movement against the US Dollar (USD) on Friday, increasing the price of AUDUSD to more than 0.7580 following the release of worse than expected nonfarm payrolls release yesterday. The technical bias however remains bearish due to a Lower Low in the ongoing wave on hourly chart.

Technical Analysis

As of this writing, the pair is being traded around 0.7590. A support can be noted near 0.7565, the low of the yesterday 0.7531, the low of 2015 and then 0.7500, the psychological level.

On the upside, the pair is expected to face a hurdle near 0.7605, the 23.6% fib level ahead of 0.7651, the 50% fib level and then 0.7737, the high of the last major wave as demonstrated in the above chart. The technical bias will also remain bearish as long as the 0.7737 resistance area is intact.

US Job Data

The US Corporations added 223K new jobs in June as compared to 254K (revised) in the month before, down beating the average forecast of 230K, a government report said yesterday. Generally speaking, higher Nonfarm Payrolls figure is seen as positive for the US Economy as well as US Dollar and vice versa thus a worse than expected actual outcome spurred bullish momentum in the price of AUDUSD and the same trend is likely to continue in the near future.

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. The trade should however be stopped out on a daily closing below the 0.7500 support area as described above.'

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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