AUD/USD has just come off a strong selloff and looks ready to make a pullback to the Fibonacci retracement levels marked on the 4-hour time frame. It seems that the right shoulder on the potential head and shoulders pattern is about to form if the Fib levels hold.
Stochastic is still around the overbought levels, indicating that the selloff could resume soon. The 50% Fib is in line with the .9500 major psychological level and an area of interest, making it a potential resistance area.
Shorting at .9500 with a stop above the 61.8% Fib level or .9575 would make a 2:1 trade if one aims for the recent lows around .9350.
By Kate Curtis from Trader’s Way