Aussie Dollar Plunges As Bears Gain Momentum

The Australian Dollar (AUD) inched lower against the US Dollar (USD) on Monday, decreasing the price of AUDUSD to less than 0.8000 following some key economic releases. The technical bias shall remain bearish because of a lower low in the ongoing downside move.

AUD/USD Technical Analysis

As of this writing, the pair is being traded around 0.7994. A support can be noted around 0.7500, an immediate horizontal support ahead of 0.7450 the psychological number and then 0.7367, another key horizontal support as demonstrated in the given below chart.

On the upside, a hurdle can be noted near 0.8024, an immediate horizontal resistance level ahead of 0.8100, the psychological level and then 0.8249, the high of the last major upside rally as demonstrated in the given above chart. The technical bias shall remain bearish as long as the 0.8024 resistance area is intact.

US Consumer Sentiment

U.S. consumer sentiment fell in the January mid-month reading, moving further from the decade high reached in October.

The University of Michigan’s survey of consumer attitudes for January slipped to 94.4, after falling to 95.9 in December. Economists polled by Reuters expected the reading to increase to 97.

The survey’s chief economist Richard Curtin noted that 34 percent of consumers spontaneously mentioned tax reform. Of those, 70 percent of consumers said the impact from the new tax reform law would be positive, while 18 percent said it would be negative.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair around current levels may be a good strategy in short to medium term.

 

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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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