Current Level: 0.6950
How We See it Playing Out
The AUDUSD uptrend had stalled and it looked set to break lower. The price action hasn’t exactly been amazing but it’s also good to see the AUDUSD making a new yearly high at 0.7060 and then fail to go on with the move. This suggests the recent uptrend is over and with a break back down through Hourly and Daily support trendlines, I think we’ll see it drift down towards 0.6600 this week.
The downside break has been delayed by a few days after Monday’s announcement by the FED that they would begin buying corporate bonds and rolling out more stimulus put an underlying bid tone on the equity markets. But the positive move on the equity indices, up 0.62% on the day, was pretty crap for such measures. So once the initial euphoria subsides I think we’ll see yesterday’s moves corrected and then when it breaks down through 0.6790 it should accelerate to the downside.
The Break trade is the logical strategy. That’s because when it breaks back down all upward momentum will be out of the market and there won’t be anything holding the pair up. If it continues to rally then we’ve lost nothing. So it either works or we don’t get set.
Momentum will come during the North American session so keep a close eye on the equity markets for direction. We need US equities to go down to get this trade-in play!
AUDUSD Hourly Chart
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