Aussie Dollar Rallies As Bulls Gain Strength

The Australian Dollar (AUD) rallied against the US Dollar (USD) on Thursday, increasing the price of AUDUSD to more than 0.7550 ahead of the US consumer sentiment data. The technical bias shall remain bullish because of a higher high in the ongoing upside rally.

Technical Analysis

As of this writing, the pair is being traded around 0.7584. A hurdle can be noted near 0.7600, the 23.6% fib level on daily timeframe as well as psychological number ahead of 0.7667, the trendline resistance on higher timeframe and then 0.7680, the short term horizontal resistance.  A break and hourly closing above the 0.7667 resistance shall incite renewed buying interest, validating a move towards the 0.7800 resistance zone.

On the downside, a support can be noted around 0.7577, a key trendline support on the four-hour timeframe ahead of 0.7450-0.7475, the short term horizontal support and then 0.7159, the swing low of the last major downside move on higher timeframes. The technical bias shall remain bullish as long as the 0.7450 support area is intact.

How AUDUSD Reacted on Consumer Sentiment Releases in Past?

Last time the University of Michigan released its consumer sentiment data on 31st March, 2017. The AUD/USD pair rose by 10 pips after the release of consumer sentiment figure as the actual reading was downbeat i.e. 96.9 v 97.6.

The pair however fell by almost 20 pips after the release of March 17, 2017 report as the actual reading came out 97.6 points vs the 97 points forecast.

Trade Idea

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

What Assets to Trade

In addition to AUD/USD, trading USDCAD, USDCHF, USDJPY and EURUSD can be a good strategy as the aforementioned pairs are highly reactive to the consumer sentiment release.

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