Last week, favored a long position above 0.9200 targeting 0.9470. Though AUDUSD did not reach as high as we had hoped, the upside momentum we forecast materialized as expected. The week closed with the pair at 0.9288, booking just over 80 pips in profit.
Looking ahead, we see today’s price action forming a Large Black Candle ahead of the psychologically significant 0.9200 level. This is typically a strong bearish signal, though our reading of risk-reward does not offer a tempting-enough entry to go short. On a break of 0.9200 we will look for price action to take AUDUSD to the long-term supporting trend line just above 0.9100. We expect this support to hold and position Australian dollar bulls to regain momentum. Should we see a break at the trend line, AUDUSD may be in for substantial losses in the coming weeks.
AUD/USD Strategy
We remain flat as we wait to establish directional bias.
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