Pending Short Aussie Sale above 0.76

AUD/USD (0.7492)

Points to consider in this Aussie Dollar Market:

• The Aussie Dollar breaks below the 2016 down trend. Sellers are eyeing support levels below 0.75 now.
• Looking to enter a short Aussie Dollar sale above 0.76 on a corrective bounce.
• Trade strategy: Pending short AUD sale at 0.7602

The AUD/USD Forex market is possibly restarting its long-term down trend after price action broke back below a upwards sloping trend line, visible on the below daily MT 4 chart. This trend line had been capping gains for most of 2016. Also note, on the below chart, an appearance of an evening star candlestick below 0.79. The Australian Dollar then broke lower as expected.

Aussie Dollar Technical Analysis

Let’s discuss today’s AUD/USD daily technical analysis then the trade strategy. There is near term support at 0.7450. A daily close below this first downside barrier challenges the next technical support level at 0.7330. The alternative Australian Dollar analysis, should the AUD move higher, notes support not resistance lining up at 0.7562. A break above this first upside barrier challenges a horizontal pivot level lining up at 0.7680.

Trade Strategy

Now let’s discuss today’s trade strategy for this Forex market. From a risk to reward perspective, price action is too close to a technical support level to warrant a short AUD sale. That trade is a bit premature. However, I am keen to enter a short Australian Dollar trade in line with the dominant downtrend in this market so I will make the following move: a pending short AUD sale at 0.7602. If activated, the first target will be at 0.7450. The stop loss will, initially, be placed to go active on a daily close above 0.7680.