Just when I thought AUD/USD would never look back from its selloff, the pair makes a quick retracement this week. Time to hop in?
On its 1-hour time frame, it can be seen that the pair retraced to the 50% Fibonacci retracement level, which lines up with a former support area. To top it off, a bearish divergence has formed, with price making lower highs and stochastic drawing higher highs. Thanks for pointing this out, Big Pippin!
Fundamentally, the Australian dollar is still at a weak spot, given the downbeat outlook for China and the emerging markets. It doesn’t help that data from Australia has been disappointing lately and that risk appetite is low.
Of course I’ll be keeping close tabs on the upcoming U.S. durable goods orders and CB consumer confidence releases, as well as the much-anticipated FOMC statement on Wednesday. For now, I’m thinking of shorting at market, with a stop above the .8900 major psychological level and a target of .8600. What do you think?
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