AUD/USD Break and Retest Day Trade (July 4, 2013)

AUD/USD has been undergoing heavy selling pressure, but it appears the pair has found support around the .9100 area. It could pull up for a quick retracement before the selloff resumes.

Using the Fibonacci retracement tool on the 1-hour time frame shows that the 50% Fib lines up with a former support level at the .9150 minor psychological handle. Stochastic has already reached the overbought region but doesn’t appear ready to head back down yet, which suggests that bulls could still push AUD/USD a bit higher.

A short order at .9150 with a stop above the 61.8% Fib and a target of .9100 could yield a good reward-to-risk ratio for a day trade. There are no reports due from the US, as traders are off on their Fourth of July holiday.

By Kate Curtis from Trader’s Way