AUD/USD Technical Analysis: Waiting for Short Trade Setup
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- AUD/USD Technical Strategy: Pending short
- Aussie Dollar resumes selloff, drops below 0.74 figure vs. US namesake
- Waiting for improved risk/reward parameters to establish short position
The Australian Dollar resumed the descent against its US namesake after brief pause to consolidate, with sellers establishing a foothold below the 0.74 figure. The pair reverseddownward as expected after pricesproduced a bearish Evening Star candlestick pattern.
Near-term support is at 0.7331, the 50% Fibonacci retracement, with a break below that on a daily closing basis opening the door for a test of the 61.8% level at 0.7212. Alternatively, a reversal back above the 38.2% Fib at 0.7450 paves the way for a challenge of trend line support-turned-resistance in the 0.7577-96 area.
An entry order to sell AUD/USD at 0.7603 was left pending last week and positioning has now changed such that the setup is no longer valid. At present, prices are too close to support to justify selling from a risk/reward perspective once again. A better setup will be sought on a rebound in the days ahead.