AUD/USD Technical Analysis: Looking to Re-Enter Short Trade
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- AUD/USD Technical Strategy: Flat
- Aussie Dollar Soars After Dovish ECB Announcement, Takes Out 0.70 Figure
- Waiting to Re-Enter Short in Line with Long-Term Trend After Bounce Fizzles
The Australian Dollar short sharply higher against its US counterpart, producing the largest one-day advance in seven months and reclaiming a hold on the 0.70 figure. The pair found fuel in a broad-based recovery in risk appetite following a dovish monetary policy announcement from the ECB.
Near-term resistance is at 0.7018, the 38.2% Fibonacci retracement, with a break above that on a daily closing basis opening the door for a test of the 50% level at 0.7077. Alternatively, a reversal below the 23.6% Fib at 0.6945 paves the way for a challenge of the 14.6% retracement at 0.6900.
We sold AUD/USD at 0.6900. The trade was closed after prices issued a daily close above 0.6950, triggering the stop-loss. Looking ahead, the dominant trend continues to look bearish. With that in mind, we will wait on the sidelines for the current upswing to exhaust itself and aim to re-enter short.