AUD/USD bulls stepping in with a 0.6950 target on the horizon
- Bulls are eyeing up constructive long entry point around a 61.8% Fibo target area.
- Holiday choppiness could jeopardise an otherwise convincing long trade.
AUD/USD is currently trading at 0.6885 having travelled from a low of 0.6848 to a high of 0.6888. Bulls are staying in control as the price reverses 50% of the downside correction from the post-trade deal announcement 0.6938 highs.
AUD/USD topped-out through the 200-day moving average following de-risking into key domestic events on the Aussie calendar. Bulls had run their course on the back of the trade deal news, which was already expected and somewhat priced into the Aussie. What followed were a number of data points from Australia which included the RBA minutes and jobs data, both of which has left a rate cut in the table, despite headline strength in the jobs report which will have to be balanced against past downward revisions and the fact that most were part-time.
"The drop in the unemployment rate will be seen as a further indication of resilience," analysts at TD Securities explained. However, the analysts also explained that the RBA has placed a lot of emphasis on strong jobs growth not translating into wage growth and this report is unlikely to change the perspective of a likely Feb rate cut.
A softer US dollar has also underpinned a bullish bias for the pair into the final trading days of the holidays, although US dollar repatriation and a lack of liquidity can make for a volatile finish for the year, which could jeopardize any conviction from additional advances at this stage.
AUD/USD levels
AUD/USD is currently trading along an ascending support structure which is making for a bullish bias for a break back above the 200-day moving average for a constructive long entry point through the 0.6920/50 area which has a confluence of the July -Oct 61.8% Fibonacci retracement level.