Here an update on our AUD/USD short (entered at 0.7100) as last discussed in the weekly report. Finally, we’re seeing the weakness anticipated in the pair as it drops to as low as 0.7058 so far today. The solid break of 0.7088 minor support argues that corrective rise from 0.7040 is likely competed at 0.7159 already. And the larger fall is possibly resuming. Further decline should be seen to 0.7040 first.
Break of 0.7040 will resume whole down trend form 0.8135 and should target a test on 0.6826 (2016 low). It’s still early to tell. But we’re looking at the possibly of resuming long term down trend from 1.1079 (2011 high). We’ll looking downside momentum of the next fall, upon breaking 0.7040, to gauge the chance.
For now, we’ll hold on to the short position. Stop will be lowered from 0.7185 (slightly above 50% retracement of 0.7314 to 0.7040 at 0.7178) to 0.7165 (slightly above 0.7159 resistance). We’ll decide whether to exit at around 0.6826 later.
