AUDUSD Setting Up For Recovery Post US Pending Home Sales30 June, 2015 by Aayush Jindal in Market Analysis
- AUDUSD traded lower towards 0.7600 before finding buyers to trade back higher.
- A breakout pattern is formed on the hourly chart, i.e. likely to open to the doors for more upsides in the near term.
- US Pending Home Sales released by the National Association of Realtors posted an increase of 0.9% in May 2015, compared with the forecast of 1.2%.
US Pending Home Sales
Earlier during the NY session, the US Pending Home Sales, which is a leading indicator of trends of the housing market in the US was released by the National Association of Realtors. The forecast was lined up for an increase of 1.2% in May 2015, compared with the preceding month. However, the outcome was a bit on the lower side, as there was a rise of 0.9%. The outcome was a positive one, as it registered the highest level in over nine years.
The year-over-year reading was on the higher side, as it registered a gain of 8.3% in May 2015, compared with the same month a year ago. According to the report, the index has now increased for nine consecutive months and is at its highest level since April 2006.
Commenting on the report, the NAR chief economist, Lawrence Yun, mentioned that “contract activity rose again in May for the fifth straight month, increasing the likelihood that home sales are off to their best year since the downturn”.
Overall, there was a US Dollar correction noticed Intraday after huge gains. The AUDUSD pair took the advantage and trade higher.
AUDUSD Technical Analysis
The Aussie Dollar opened the week with a gap lower this week, and traded as low as 0.7586. There was a buying interest noted around the mentioned area that pushed the pair back higher. The pair managed to close the gap, and now forming a flag pattern. The pair corrected lower and found support around the 50% Fib retracement level of the last leg from the 0.7586 low to 0.7693 high.
There is a chance that the pair might break the flag pattern and trade higher. A break above the same could take the pair towards the 100 hourly simple moving average, followed by the 200 hourly SMA.