AUD/USD Technical Analysis: Down Move Gaining Traction
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- AUD/USD Technical Strategy: Short at 0.7970
- Aussie Dollar breaks secondary trend support, hinting at further weakness
- Short trade triggered, aiming for a decline toward 0.78 versus the US Dollar
The Australian Dollar has fallen to the lowest level in a month against its US counterpart, with a breach of trend line support hinting at further losses ahead. Preliminary topping was noted last week but a secondary support break appeared to be needed for confirmation. It now looks to have transpired.
The next major layer of support lines up in the 0.7808-19 area (August 15 low, 38.2% Fibonacci retracement), with a daily close below that opening the door for a test of the 50% level at 0.7725. Alternatively, push back above trend line support-turned-resistance – now at 0.7979 – exposes the July 27 high at 0.8066 anew.
Risk/reward considerations appeared acceptable to attempt a short trade and AUD/USD was sold at 0.7970, initially targeting 0.7819. A stop-loss will be activated on a daily close above 0.8051. Profit on half of the position will be booked and the stop moved to breakeven when (and if) the first objective is met.
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