On Tuesday, the Australian Dollar inched higher against the US Dollar, raising the price to over 0.6900. The price increase came after key economic news was released. Despite a drastic decline over the last week, the pair somehow managed to close high compared to the lower high printed during the last downside move, so the technical bias could remain bullish as shown in the graph.
The last week finishes with favorable news from the Retail Sales and Trade Balance which places its effect on the rising price significantly.
The Retail Sales, a survey of merchandise sold by retailers, is based on a sampling of retail stores of various types and sizes and is considered as an indicator of the Australian economy’s pace, stood at 0.9 percent this month, more than 0 percent and 0.4 percent, last month, and economist prediction respectively. It shows retail sector performance over the short and medium-term. Positive economic growth predicts bullish trends for the AUD while negative or bearish reading is viewed as low.
Likewise, the trade balance indicator at AUD also helps to drive up prices, as the trade balance of this month is 5800 M compared to the 4502 M of last month, Trade Balance provides an early indication of net export performance. If there is a stable demand in exchange for Australian exports, that would lead to a positive balance of trade growth and that should be positive for the AUD.
As of writing this piece, AUDUSD is being traded near 0.6913. As the price moves upwards, there may be a few resistance levels that come across the price that might cease its upward movement, as demonstrated in the graph below.
On the other hand, the pair may also receive some support near multiple levels if the price started falling downside such as 0.6859, the confluence of a trend line and horizontal support level which might act as a strong support level keeping the price to stick around this level.
Considering the pair’s price behavior over the last few days, it may not be a good idea to open positions for a short interval of time.