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
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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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