AUD/USD Technical Analysis: Down Move Below 0.71 Expected
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- AUD/USD Technical Strategy: Short at 0.7187
- Australian Dollar vulnerable to deeper losses following support break
- Short position triggered on expectation of decline below 0.71 figure
The Australian Dollar looks poised for deeper losses after prices established a foothold below the 0.72 figure against its US counterpart. Prices turned downward as expected after carving out a bearish Evening Star candlestick pattern above the 0.78 threshold.
From here, a break below the 76.4% Fibonacci retracement at 0.7065 paves the way for a test of the January 15 low at 0.6827. Alternatively, a reversal back above the 0.7212-43 area (61.8% level, February 4 high) sees the next upside barrier in the 0.7300-31 region (May 10 low, 50% Fib).
Technical positioning and risk/reward parameters now appear attractive to enter short and a position has been triggered at 0.7187, initially targeting 0.7065. A stop-loss will be activated on a daily close above 0.7243. Profit on half of the trade will be booked and the stop-loss trailed to breakeven when prices hit the first objective.
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