Here’s an update on our AUD/USD short (entered at 0.7100, stop at 0.7165), last discussed here.
Finally, AUD/USD has completed the consolidation from 0.7040 and resumed recent down trend. That came later then we expected, but nevertheless, it’s a positive development for our strategy. As noted before, we’d expect the down trend from 0.8135 to target a test on 0.6826 (2016 low). At the same time we’re also looking at the possibility of resuming long term down trend from 1.1079 (2011 high).
For the latter case, it should now be time to see some downside acceleration, ideally. And to show that momentum, AUD/USD should break through 61.8% projection of 0.7314 to 0.7040 from 0.7159 at 0.6990 easily and firmly without much hesitation. If that’s the case, even though, support zone between 0.6826 and 100% projection 100% projection at 0.6885 might limit downside at first attempt, support won’t last long. However, if the break of 0.6990 is sluggish, we’d probably not even see a break of 0.6826 low.
For now, we’ll hold on to the short position, lower the stop to 0.7100 (breakeven). We wont’ put a target yet and will keep on monitoring to decide the exit.
