Going into the weekend, I will look to remain on the sidelines and wait for further developments at the start of next week before entering a position. One pair that I am keeping a close eye out for is the AUDUSD. As of late, price action has reversed course after rallying for three consecutive days. As my overall bias is to the downside, I am more inclined to short the pair at the 100 day SMA, which also stands to be the 61.8 percent Fibonacci retracement on the 4/12, 5/21 downswing. My reason for a short position at that level comes on the back of the 20-day SMA crossing over above the 50 day SMA, which is indicative of further gains. At the same time, if prices do reach 0.8900 over the coming week, this will likely place the relative strength index in overbought territory. It is also worth noting that the purchasing power parity for the pair stands at 20.06 percent overvalued.
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