Aussie Dollar Remains Weak amid US GDP News

The Australian Dollar (AUD) inched lower against the US Dollar (USD) on Monday, decreasing the price of AUDUSD to less than 0.7700 following some key economic releases. The technical bias shall remain bearish because of a lower low in the ongoing upside move.

AUD/USD Technical Analysis

As of this writing, the pair is being traded around 0.7669. A support can be noted around 0.7500, an immediate horizontal support ahead of 0.7550 the psychological number and then 0.7467, 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 Growth Data

US economic growth was surprisingly resilient in the third quarter, according to Friday morning’s preliminary estimate from the Bureau of Economic Analysis. Output increased 3.0%, well above the 2.5% consensus forecast via Econoday.com and only slightly below Q2’s solid 3.1% advance.

For all the talk that blowback from recent hurricanes would weigh on economic activity in Q3, there was nary a sign of trouble in the headline number. Excluding the previous quarter, the 3.0% advance in Q3 marks the strongest GDP rise in three years.

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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