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AUD/USD Technical Analysis: Short Trade Now in Play
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Talking Points:
AUD/USD Technical Strategy: Short at 0.7214
Australian Dollar Drops Most in 4 Years, Breaks Range Floor
Short Trade Triggered Aiming for Support Below 0.71 Figure
The Australian Dollar came back under pressure, putting in the largest daily decline in nearly four years against its US counterpart. The typically sentiment-geared currency had been slow to react as risk aversion began to sweep the financial markets but a belated response appears to be underway as broad-based turmoil bleeds into RBA policy bets.
A break of long-stubborn range support above the 0.72 figure has exposed the 38.2% Fibonacci expansion at 0.7084 as the next downside barrier of significance. A daily close beneath that opens the door for a test of the 50% level at 0.6974. The 23.6% Fib at 0.7219 has been recast as near-term resistance, with a reversal back above that putting the 14.6% expansion at 0.7303 in focus once again.
We will now enter short, initially targeting 0.7084. A stop-loss will be activated on a daily close above 0.7303. We will take profit on half of the position and move the stop to the breakeven level once the first objective has been reached.
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