AUD/USD Technical Analysis: Short Trade Setup Established
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- AUD/USD Technical Strategy: Flat
- Aussie Dollar Posts Worst 2-Day Loss Streak in 6 Weeks, Breaks Near-Term Support
- Pending Short Trade Entry Established Aiming for Improved Risk/Reward Parameters
The Australian Dollar is on the defensive against is US counterpart once again, producing the sharpest two-day losing streak in six weeks. Prices have broken below trend line support guiding the move higher since early November, hinting the near-term bias has shifted to favor the downside once again.
A daily close below resistance-turned-support at 0.7184 opens the door for a test of rising trend line support set from early September, now at 0.7064. Alternatively, a move back above the horizontal pivot at 0.7283, marked by the November 24 swing high, paves the way for another challenge of the 38.2% Fibonacci retracement at 0.7387.
The break through near-term trend line support argues in favor of a short position but prices are too close to support to enter the trade immediately from a risk/reward perspective. Instead, we will establish an entry order to sell the pair at 0.7250. If triggered, the position will initially target 0.7184 with a stop-loss activated on a daily close above 0.7283.
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