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AUD/USD Technical Analysis: Short Position Back in Play

AUD/USD Technical Analysis: Short Position Back in Play

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Talking Points:

  • 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.

Losing Money Trading Forex? This Might Be Why.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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