The AUDUSD was trading lower overnight as investor took precautions before the release of delayed economic data in the USA.
Unemployment Rate was lower at 7.2% but better than expected. Core Retail Sales was 0.4%, better than the expected 0.2% but lower than the previous announcement of 0.8%.
As soon as the data was released in the morning (New York Time) the AUDUSD increased to $0.97 plus. The US Dollar index, in contrast, was lower.
Forex traders were keen to buy the AUDUSD as long as the Core Retail data was somehow negative. The AUDUSD have been in a good positive momentum but the question for the rest of the traders that want to buy the AUDUSD in a longer term, is if the Australian Dollar recent recovery is sustainable enough to profit.
At $0.97 the AUDUSD should encounter plenty of resistance even if technical indicators are supporting a bullish momentum. $0.97 has been a strong level of resistance and support during recent years. The U.S economy has plenty of room to grow and so does its currency. Especially at the current level where is trading; while not the lowest is considered good returning value.
AUDUSD traders will be already considering tomorrow’s Australian CPI, which is forecasted to be 0.4%, lower than the previous reading. That could also help strength the currency at this level of $0.97-$0.98.
For a quick trade it could be worth it, but long term trades should be avoided, as this could be the pick of the rebound before the AUSUSD turn back down under.
In the other hand short traders could wait a bit longer before positioning short. This might give better profits than fighting for small slice of the upward profit. When technical indicators turn negative showing an overbought market it could be the time for it. Perhaps somewhere around parity level of $0.99-$1.01.