AUD/USD Technical Analysis: Short Position Back in Play
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- AUD/USD Technical Strategy: Short at 0.7058
- Break of Two-Month Support Line Hints Long-Term Aussie Dollar Down Trend Resuming
- Short Position Triggered, Initially Aiming for Decline Toward 0.69 Figure vs. US Dollar
The Australian Dollar looks to be resuming the long-term down trend against its US counterpart following a two-month corrective recovery. Prices broke rising trend line support established from early-September lows in the wake of a dramatically better-than-expected US jobs data.
The next major layer of support comes in at 0.6902, the 38.2% Fibonacci expansion, with a break below that on a daily closing basis opening the door for a test of the 50% level at 0.6754. Alternatively, a reversal back above trend line support-turned-resistance at 0.7095 clears the way for a challenge of a horizontal pivot at 0.7199.
We managed to take only partial profit on our previous short position from 0.7290 and positioning now seems attractive to re-enter the trade, initially targeting the September 4 low at 0.6907. A stop-loss will be activated on a daily close above the 0.72 figure. We will book half of the position and trail the stop-loss to breakeven once the first target is hit.
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