Selling AUD/USD: reasons and targets
I see a great trading opportunity in selling the Australian dollar versus the US dollar these days. The “long-legged doji” candle on Friday confirmed the recoveries are limited. Strong resistance lies in the 0.7850/7880 area. This is where 38.2% Fibonacci lies. The bearish trend remains active below 0.8030 (61.8% Fibonacci).
The 0.7750 support area still contains the bearish pressure, but I expect it ti intensify at the end of the week. On Thursday Australia will release employment data (employment is forecasted to decline, while jobless rate – to pick up). On Friday the RBA Governor Stevens delivers a speech. He will likely sound dovish, justifying the recent rate cut by downgrading the economic forecasts.
Trade idea: SELL AUD/USD on a break below 0.7750 with a target of 0.7630 and a stop at 0.7800.
Chart. H4 AUD/USD