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AUD/USD Technical Analysis: Short Position Re-Established

AUD/USD Technical Analysis: Short Position Re-Established

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Talking Points:

  • AUD/USD Technical Strategy: Short at 0.7273
  • Aussie Setup Little-Changed After Upswing Triggers Breakeven Stop on Short
  • Opting to Re-Enter Position, Initially Targeting Another Test Below 0.72 Mark

The Australian Dollar continues to consolidate below the 0.73 figure against its US counterpart having broken support set from early November. Overall positioning may be carving out a bearish Head and Shoulders topping pattern, although confirmation is still pending for now.

From here, a daily close below resistance-turned-support at 0.7184 opens the door for a challenge of 0.7089, the intersection of a rising trend line set from September lows and the 23.6% Fibonacci expansion. Alternatively, a push above horizontal pivot resistance at 0.7283 paves the way for a test of the 38.2% Fib retracement at 0.7387.

We sold AUD/USD at 0.7250 and subsequently booked profit on half of the position. The second half of the trade was stopped out at breakeven. Overall positioning remains broadly unchanged from the time of initial entry however and we will re-enter the position. The initial target will be 0.7184 once again, with a stop-loss activated on a daily close above 0.7283. As before, we will close out half of exposure and move the stop to breakeven once the first objective is met.

Losing Money Trading Forex? This Might Be Why.

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