- Summary:
- After falling to its lowest level since 2003 yesterday, AUDUSD is steadier in today's Asian session with positive data and an improvement in sentiment.
After dropping to its lowest level since 2003 at 0.5957, AUDUSD seems steadier today following positive data and as risk improves. The currency pair is up by over 0.30% from its opening price at 0.6019.
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According to data released by the Australian Bureau of Statistics, retail sales in the country grew by 0.4% in February. This effectively erased the 0.3% contraction seen in January. A closer look at the report reveals that supermarkets saw the highest levels of consumer spending. Meanwhile, non-essential spending on clothing, footwear, and accessories lagged.
Meanwhile, a Chinese official earlier said that a Japan-developed drug is effective in treating the coronavirus. Favipiravir, also known as Avigan, is manufactured by a subsidiary of Fujifilm. It has been marketed since 2014 as an anti-flu drug and seems to be helping coronavirus patients improve. Consequently, this news is helping ease investor fears which have been grappled by the coronavirus pandemic.
AUDUSD Outlook
On the hourly time frame, technicals suggest that AUDUSD may soon continue its drop. When you connect the highs of March 11, March 12, March 16, and March 17, we can see that the currency pair is testing resistance at the falling trend line. This price, around 0.6020, also coincides with the 38.2% Fib level when you draw the Fibonacci retracement tool from the high of March 17 to its intraday swing low.
Reversal candlesticks around this price could mean that AUDUSD may soon fall to its recent lows at 0.5959. If support does not hold, it may even go as low as 0.5470 where it bottomed on August 1998.Alternatively, a closer look at the 15-minute chart reveals that buyers may soon push price higher. AUDUSD has made higher lows after a series of lower lows. Consequently, an inverse head and shoulders pattern has formed. In forex trading, this is considered as a bullish reversal pattern. A break of the neckline resistance at 0.6020 would complete the chart pattern. It could mean that AUDUSD may soon rally to yesterday’s high at 0.6148.