The Australian Dollar (AUD) rose moderately against the US Dollar (USD) on Friday, increasing the price of AUD/USD to more than 1.9400 following the release of Australia’s home loans report. The sentiment still remains bullish due to Higher High and Higher Low in the recent wave.
As of this writing, the pair is being traded near 0.9401. A hurdle may be noted around 0.9433, the 23.6% fib level ahead of 0.9455, the intraday high of yesterday and then 0.9504, the swing high of the last major upside rally as demonstrated in the following chart. A break and daily closing above the 0.9500 handle could spur a renewed buying interest, opening doors for the 0.9600 milestone.
On the downside, the pair is likely to find a support near 0.9361, the intraday low of yesterday ahead of 0.9328, the swing low of the recent correction wave and then 0.9300, the psychological level. The sentiment will remain bullish as far as the 0.9328 support area is intact.
Australia Home Loans
The Australian Bureau of Statistics (ABS) on Friday released the home loans report which shows the level of growth in the real estate market. The home loans remained 0.0% in May as compared to -0.2% in the month before, up beating the median projection of -0.1%. Generally speaking, higher home loans are considered positive for the economy, hence better than expected actual outcome spurred bullish momentum in the pair.
Keeping in view the overall technical and fundamental outlook, selling the pair around the 0.9500 handle still appears to be a good strategy for the long run, the trade should however be stopped out on a daily closing back above the 0.9500 resistance area as described above. Not to mention, always use proper risk & reward ratio to optimize your profits.