Partner Center Find a Broker

I’m still reeling from my EUR/AUD loss so I just decided to take it easy this week and stick with a simpler forex setup.

As Forex Gump mentioned earlier this week, it appears that sentiment is shifting for the Australian dollar, as the cautious RBA minutes and the prospect of government budget cuts led to a sharp AUD selloff. With that, AUD/USD made a strong break below the rising trend line on the 4-hour time frame:

AUD/USD 4-hour Forex Chart
AUD/USD 4-hour Forex Chart

Do you think it counts as a valid breakdown though? Earlier today, the Chinese economy showed signs of a rebound when the HSBC flash manufacturing PMI jumped to its highest level in five months. Although the index fell short of indicating industry expansion, Aussie bulls charged quickly when this news spelled better prospects for Australia’s commodity exports.

With that, AUD/USD is coming close to testing the broken trend line support, which might now act as resistance. I’m considering shorting on a pullback to the .9300 area but I’m still trying to understand which among the recent fundamental events are just short-term noise and which ones could shape the longer-term trend.

Care to share your thoughts?

Happy time

Other Popular Articles:

What is the STA strategy? Q1 2014 in Review Comdoll Trading Kit EUR/AUD Trade

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.