AUD/USD Set to Turn Bearish Amid Forecast of Improving US Core Durable Goods Orders

AUD/USD – Technical Analysis for Forex Trading in Australia

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United States – Core Durable Goods Orders

On Monday, at GMT 2:30 p.m., the US Census Bureau will release the month-over-month core durable goods orders figure, which measures the changes in the total value of all new purchase orders made to the US manufacturers for durable goods over the past month. However, the US Census Bureau excludes goods from the transportation sector in this figure in order to offer an accurate picture.

Forex traders consider the US core durable goods orders to be the primary gauge of production situation in the economy, as an increase in purchase orders indicates that US manufacturing activity and growth will happen in the near future.

Last month, the US core durable goods orders increased by 0.5% and the forecast for this month is currently set at an increase of 0.5% as well.

Australia – Building Approvals

On Thursday, at GMT 1:30 a.m., the Australian Bureau of Statistics will release the national month-over-month building approvals figure, which measures the changes in the number of approvals of new buildings.

Since a build permit indicates new construction work, it suggests that there would be additional positive economic activities. For example, new jobs would be created for construction workers. Therefore, Forex investors consider this data regarding new building approvals to be a leading indicator of the overall economic health of the country.

Last month, the building approvals figure went down by -1.2% and the forecast for this month is currently set at an additional decrease of -0.4%.

Trade Recommendation for the AUD/USD

AUD/USD Analysis for forex trading in Australia

Since December 23, 2016, the AUD/USD has climbed up by around 520 pips, and finally found strong resistance near the 0.7730 level last week. In the last two days, the AUD/USD price has come down a bit and penetrated below the support around 0.7676 as well.

As the US core durable goods orders figure is expected to increase by 0.5%, but the Australian building approvals figure is expected to decline by -0.4%, it would likely set a bearish fundamental outlook for the AUD/USD and forex trading in Australia this week. Hence, if the price penetrates below the 0.7656 level, it would likely attract additional bearish momentum in the market.

Under the circumstances, it would be recommended that Forex traders consider placing a SELL order at market price for the AUD/USD with their Forex brokers, as soon as it is trading below the 0.7640 level. A possible profit target for this trade would be around the 0.7610 level. On the other hand, Forex traders should consider placing a stop loss order above 0.7685.

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Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at contact@asifimtiaz.com

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Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at contact@asifimtiaz.com

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