AUD/USD Technical Analysis: Down Move May Accelerate
AUD/USD Technical Strategy: NET SHORT AT 0.7552
- Australian Dollar down move may accelerate after chart support break
- Sellers now aiming to challenge 61.8% Fib support below the 0.74 level
- Scaling into short position for the next leg of the evolving down trend
The Australian Dollar looks vulnerable to deeper losses against its US counterpart after prices breached support near the 0.75 figure. A bullish Morning Star candlestick pattern that might have preceded a bounce has been invalidated, with the pair sinking to an 11-month low instead.
From here, a daily close below the 61.8% Fibonacci retracement at 0.7327 opens the door for a challenge of support in the 0.7145-65 area, marked by swing lows set in May and December of 2016. Alternatively, move back above 0.7502 (December 8, 2017 low) targets wedge floor support-turned-resistance now at 0.7563.
Current positioning seems to offer acceptable risk/reward parameters to scale back into the AUD/USD short trade triggered at 0.7608 after partial profit was booked on hitting the position’s first objective. A cumulative stop-loss will be activated on a discretionary basis.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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