AUD/USD Retracement Scenario (December 6, 2013)

AUD/USD has broken down to new lows yet again, dipping below the .9050 minor psychological support thanks to stronger than expected U.S. GDP data. This was enough to revive taper expectations for the FOMC meeting in December, but this could depend on the NFP release today.

However, a pullback might be in the cards before the pair heads any lower. The 38.2% Fibonacci retracement level seems to be acting as resistance at the moment while stochastic is confirming a potential selloff.

Shorting at market with a stop above the farthest Fib level (.9100) and aiming for the longer-term support at .8900 could provide a high return on risk, but be mindful of the additional volatility from the NFP release in today’s New York trading session.

Kate Curtis from Trader’s Way