Potential swing trade short on AUD/USD
The AUS/USD is within an established bear trend on the 4-hour chart, and closed to a fresh YTD low on Friday having broken beneath the March and April lows.
Prices have managed to retrace over the past two days during lower-liquidity trade whilst the US dollar’s rally took a breather. For now, we’re looking for evidence of a swing high below or around the 0.6550 – 0.6572 zone which includes the weekly pivot point, March and April’s lows.
We note that some of the heaviest volume during its previous leg lower is at 0.6532, which suggests bears are caught short whist prices retrace higher. SO whilst we see the potential for another burst higher, it’s important prices remain below 0.6580 (otherwise we can expect bears to cover and trigger a short-covering rally).
The initial target is around the 0.6500 handle / last week’s lows, a break beneath which brings the 0.6450 / weekly S1 and 0.6400 lows into focus.
Prices have managed to retrace over the past two days during lower-liquidity trade whilst the US dollar’s rally took a breather. For now, we’re looking for evidence of a swing high below or around the 0.6550 – 0.6572 zone which includes the weekly pivot point, March and April’s lows.
We note that some of the heaviest volume during its previous leg lower is at 0.6532, which suggests bears are caught short whist prices retrace higher. SO whilst we see the potential for another burst higher, it’s important prices remain below 0.6580 (otherwise we can expect bears to cover and trigger a short-covering rally).
The initial target is around the 0.6500 handle / last week’s lows, a break beneath which brings the 0.6450 / weekly S1 and 0.6400 lows into focus.
Trade closed: target reached:
Nice little swing trade short, momentum has now turned higher and looks set to take prices back within its prior range (a mediocre NFP report could help with money markets now favouring a Fed hold in June)
