AUD/USD Technical Analysis: Looking to Sell Near 0.71
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- AUD/USD Technical Strategy: Pending short at 0.7097
- Australian Dollar drops most in 3 weeks, hints bearish trend is resuming
- Looking for corrective bounce to get short just above 0.71 vs. US Dollar
The Australian Dollar turned sharply lower against its US namesake, putting in the largest daily decline in three weeks. Positioning suggests the longer-term down trend may be resuming after the currency pair recovered to a monthly high having found support above the 0.68 figure.
From here, a daily close below the 23.6% Fibonacci expansion at 0.7009 opens the door for a challenge of the 38.2% level at 0.6928. Alternatively, a reversal above the 50% Fib retracement at 0.7106 paves the way for a test of the 61.8% threshold at 0.7172.
Prices are too close to near-term support to justify entering short from a risk/reward perspective. With that in mind, we will establish an entry order to sell the pair at 0.7097 in line with our 2016 fundamental forecast. If triggered, the trade will initially aim for 0.7009 and carry a stop-loss activated on a daily close above 0.7141.
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