AUD/USD Technical Analysis: Short Trade Now in Play (26/08/15)
The Australian Dollar came back under pressure, putting in the largest daily decline in nearly four years against its US counterpart. The typically sentiment-geared currency had been slow to react as risk aversion began to sweep the financial markets but a belated response appears to be underway as broad-based turmoil bleeds into RBA policy bets.
A break of long-stubborn range support above the 0.72 figure has exposed the 38.2% Fibonacci expansion at 0.7084 as the next downside barrier of significance. A daily close beneath that opens the door for a test of the 50% level at 0.6974. The 23.6% Fib at 0.7219 has been recast as near-term resistance, with a reversal back above that putting the 14.6% expansion at 0.7303 in focus once again.
We will now enter short, initially targeting 0.7084. A stop-loss will be activated on a daily close above 0.7303. We will take profit on half of the position and move the stop to the breakeven level once the first objective has been reached.