AUDUSD - Consider A Short Trade In This Pair
The Australian Dollar is on the defensive against is US counterpart once again. Prices have broken below trend line support guiding the move higher since early November, hinting the near-term bias has shifted to favor the downside once again.
A daily close below resistance-turned-support at 0.7184 opens the door for a test of rising trend line support set from early September, now at 0.7064. Alternatively, a move back above the horizontal pivot at 0.7283, marked by the November 24 swing high, paves the way for another challenge of the 38.2% Fibonacci retracement at 0.7387.
The break through near-term trend line support argues in favor of a short position but prices are too close to support to enter the trade immediately from a risk/reward perspective. Instead, we will establish an entry order to sell the pair at 0.7250. If triggered, the position will initially target 0.7184 with a stop-loss activated on a daily close above 0.7283.
A daily close below resistance-turned-support at 0.7184 opens the door for a test of rising trend line support set from early September, now at 0.7064. Alternatively, a move back above the horizontal pivot at 0.7283, marked by the November 24 swing high, paves the way for another challenge of the 38.2% Fibonacci retracement at 0.7387.
The break through near-term trend line support argues in favor of a short position but prices are too close to support to enter the trade immediately from a risk/reward perspective. Instead, we will establish an entry order to sell the pair at 0.7250. If triggered, the position will initially target 0.7184 with a stop-loss activated on a daily close above 0.7283.
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