Places to re-enter AUD short
The reasons for further AUD weakness are present in the market: a struggling domestic outlook and global trade tensions mean that AUD is likely to be offered. There is an increasing call for the RBA to stop saying that their next interest rate move is likely to be ‘up’. Arguably, the RBA is slightly behind the curve on their rate path with the projected rate hike in 2019 looking more unlikely at the present time.
The USD, by contrast, is in a strong position with the FED on course to raise interest rates twice this year. Furthermore, the state of the US economy is strong with some good data recently supporting USD strength, So, going forward, AUD/USD should be offered.
A good place to enter fresh AUD/USD shorts.
Price has extended and we don’t want to just jump into AUD/USD shorts as we will have too much risk. However, Looking at the 1hr chart, there is one area that leaps out as a good place to potentially enter shorts. It is the place of confluence where the 50% Fib, weekly pivot and 100EMA all converge. Place an alarm for when price gets here, as risk can be limited by either placing your stop above any rejection to the 100MA, place it higher up above the 200MA or use 25% of the Daily ATR. Three choices for stops with targets at recent lows gives a decent potential trade.
p.s. Don’t miss the fact that NAFTA talks are back on. Headlines are making for some great opportunities at the moment.