The AUD/USD pair tried to rally above the 1.04 handle during the Friday session, but was beat back and closed below it at the 1.0383 level. This market looks like it’s trying to roll over, as the Wednesday shooting star would suggest area a break of the Friday lows would have us selling and aiming for the 1.02 level as it is the next major support area. If we can get below that, and below the 1.0150 level, we think this pair could really accelerate to the downside in a global “risk off” type of trading environment. With all of the headline risks out there, it isn’t exactly a stretch to imagine that.
As for a buying set up, we would have to break the Wednesday shooting stars top in order to consider it, but do recognize that the 1.06 level will be difficult to overcome. Because of this, buying this pair will more than likely be a short-term trade at best.
Written by FX Empire