Here’s an update on AUD/USD short (sold at 0.7100), last updated here.
The trade is so far doing ok as risk aversion realized. But we’ve overestimated the strength in Dollar. Still, the price actions from 0.7040 to 0.7130 are corrective looking, which reinforces our bearish view. For now, we’ll keep the stop at 0.7185, slightly above 50% retracement of 0.7314 to 0.7040 at 0.7178. That’s because, theoretically speaking, consolidation pattern from 0.7040 could extend with another leg through 0.7130, even though it’s unlikely. Upon decisive break of 0.7040, we’ll lower the stop after AUD/USD settles below this level.
Our view is unchanged that medium term fall from 0.8135 could be resuming long term down trend. Hence, we have not decided whether to exit at around 0.6826 low yet. We’ll monitor downside momentum in both 4H and daily chart to decide at a later stage.