AUD/USD Technical Analysis: One-Month Uptrend Broken
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- AUD/USD Technical Strategy: Short at 0.7608
- Aussie Dollar rejected at 15-month trend resistance
- One-month uptrend broken, hinting at deeper losses
The Australian Dollar looks vulnerable to deeper losses against its US counterpart after prices broke trend line support guiding the one-month uptrend. The pair turned lower after putting in a bearish Evening Star candlestick pattern below resistance capping gains since April 2016.
From here, a daily close below the 38.2% Fibonacci expansion at 0.7552 opens the door for a test of the 0.7502-17 area (50% level, May 23 high). Alternatively, a move back above the 0.7613-36 zone (23.6% Fib, June 14 high) paves the way for another test of trend line resistance, now at 0.7711.
Risk/reward parameters appeared acceptable and a short position has been entered at 0.7608, initially targeting 0.7552. A stop-loss will be activated on a daily close above 0.7636. Profit on half of the trade will be booked and the stop-loss moved to breakeven upon hitting the first objective.
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