Australian Dollar Looks To Stabilize After Carry Unwind
Staying short the AUD/USD following a break below 0.8900 last week proved very profitable as the pair would reach as low as 0.8071. An ultimate test of 0.800 can’t be ruled out but at this point I will book profits as we have seen the pair trade back above significant support at 0.8114-38.2% Fibo of 0.6008-0.9408. I think that from a longer-tern view the 50.0% Fibo at 0.7711 could be where we land but it could take months before we get there. In the short-term the potential for a significant retracement exists and the risk-reward isn’t there for continuing with a short position unless we see a clear break below the 38.2% Fibo.
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