The Australian dollar had another successful week, enjoying upbeat data and global optimism. The jobs report and China’s GDP stand out in a busy week. Here are the highlights of the week and an updated technical analysis for AUD/USD.
Retail sales increased by 1.2%, triple the early expectations. Building approvals also came out well above early projections: a jump of 11.7%. Apart from positive Australian data, AUD/USD advanced also thanks to the weakness of the US dollar, partly fuelled by a report that China intends to diversify away from US Treasuries. Despite a denial, the dollar remained on the back foot.
AUD/USD daily graph with support and resistance lines on it. Click to enlarge:
AUD/USD Technical Analysis
Aussie/USD continued the uptrend and passed at 0.7860 (discussed last week) before moving to higher ground.
Technical lines from top to bottom:
0.8130 was the 2017 high and remains a top line. It is followed by 0.8065, which capped the pair’s rise beforehand.
The psychological round level of 0.80. Below, we find 0.7940, which capped the pair in August.
Quite close by, we find 0.79, a round number that capped the pair in October and also in January. 0.7860 served as support during September and is another line to watch.
0.7810 worked as a cushion for the pair in January. Below, we find 0.7730, that was a high point in June 2017 and also beforehand, working as resistance in November.
The round number of 0.77 capped the pair in mid-December. 0.7640 worked as resistance in November. 0.7595 was a swing high in early December and capped the pair.
I am bullish on AUD/USD
Is there some fuel left in the tank for another rally? Perhaps. A lot depends on the jobs report. If we get another great figure, the ongoing weakness of the US dollar could pave the way toward 0.80.
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