AUD/USD Technical Analysis: 4-Month Lows in the Crosshairs
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- AUD/USD Technical Strategy: Flat
- Australian Dollar Aims at 4-Month Lows After Five Consecutive Days of Selling
- Waiting to Find Attractive Risk/Reward Parameters to Establish Short Position
The Australian Dollar continues to sink against its US namesake, touching the lowest level in four months amid risk aversion at the start of the trading week. Prices have fallen for five consecutive sessions after breakdown downward from a Triangle chart formation, as expected.
Sellers now aim to challenge the 38.2% Fibonacci expansion at 0.6906, with a break below that on a daily closing basis opening the door for a challenge of the 50% level at 0.6758. Alternatively, a reversal above support-turned-resistance at 0.7016 marked by the November 10 low paves the way for a test of the December 17 bottom at 0.7097.
The available trading range is too narrow to enter short in line with our trading strategy from a risk/reward perspective. With that in mind, we will remain on the sidelines for the time being and wait for price action to offer a compelling short entry opportunity in line with the resuming down trend.
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