The Australian Dollar (AUD) extended downside movement against the US Dollar (USD) on Friday, increasing the price of AUDUSD to less than 0.6950 following the release of some important economic data. The technical bias has already turned bearish because of a Lower Low in the ongoing downside move.
As of this writing, the pair is being traded around 0.6928. A support can be noted near 0.6900-0.6902, the confluence of psychological number as well as swing high of the last major dip as demonstrated in the following daily chart. A break and daily closing below the 0.6900 support area could incite renewed selling pressure towards the 0.6820 support zone.
On the upside, the pair is likely to face a hurdle near 0.6935, the horizontal support turned resistance ahead of 0.7015, the 76.5% fib level. The technical bias will remain bearish as long as the 0.7326 resistance area is intact which is the swing high of the last major upside rally.
Australia Home Lending Data
Home lending in Australia has surprised analysts with its strength in the face of tighter restrictions on investor loans and slowing major property markets. Bureau of Statistics figures for November showed a 1.8 per cent increase in the number of loans being issued to owner-occupiers, to 56,798 (seasonally adjusted). Analysts surveyed by Reuters had typically expected a small fall of 0.5 per cent. Perhaps more surprising was a 0.7 per cent increase in the value of new property investment lending being approved by banks to $11.55 billion.
Considering the overall technical and fundamental outlook, buying the pair around current levels appears to be a good strategy in short to medium term if we get a valid bullish reversal candle on the daily chart.