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).

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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.

 

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