It looks like Aussie bears are eager to return! I was originally eyeing a larger correction, but do you think I should hop in at market?
Short AUD/USD Idea
In my earlier blog post, I shared my plan to short at the 61.8% Fib or the .7075 level that lines up with a descending trend line and former support. It looks like AUD/USD is already finding resistance at the nearest retracement level, though!
The 38.2% level just slightly below the .7000 major psychological resistance seems enough to keep gains in check, possibly sending the pair back to the swing low from here.
Zooming in to the 1-hour chart even shows a small double top reversal pattern that’s just been confirmed with a neckline break.
Stochastic is in the oversold region on both short-term and longer-term time frames, so I’m a bit hesitant to just jump in at market.
Besides, economic data from China and Australia so far this week have been stronger than expected, so sellers might still be waiting for more bearish catalysts before taking this pair lower. Australia has its jobs report coming up, and a weaker read is eyed, while the U.S. has its CPI and retail sales figures due later on.Disappointing data from the Land Down Under could fuel hopes of another RBA interest rate cut, especially with the backdrop of trade tensions between the U.S. and China. Tit-for-tat tariffs seem far from over, and this would likely hurt demand for commodities and overall risk appetite.
It’s still a bit early in the week, so I’ll probably sit on my hands for now and see if risk-off flows are likely to carry on. I’m hoping to get in at a better entry price, but I do hope I won’t be missing out!
What do you guys think?
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