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Talking Points:
- AUD/USD Technical Strategy: Short at 0.7611
- Aussie Dollar down trend may be resuming following a brief corrective upswing
- Short trade activated, looking for a move challenging November’s swing low anew
The Australian Dollar corrected higher against its US namesake as expected but the down trend started in early September may now be resuming. Prices were rejected on a retest of former range support and slipped back below a rising trend line set from December 2016, hinting that recent gains were corrective.
From here, a daily close below the 0.7505-32 area (23.6% Fibonacci expansion, November 21 low) opens the door for a challenge of the 38.2% level at 0.7418. Alternatively, a break above support-turned-resistance at 0.7625 sees the next upside barrier at 0.7672, the 23.6% Fib retracement.
A brief intraday bounce offered a window with acceptable risk/reward parameters to enter short and the trade was activated at 0.7611, initially targeting 0.7532. A stop-loss will be triggered on a daily close above 0.7644. Profit on half of the trade will be booked and the stop moved to breakeven on hitting the first objective.
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