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Talking Points:
- AUD/USD Technical Strategy: Short at 0.7420
- Aussie Dollar drops to the lowest level in over 6 months vs. US counterpart
- Trend bias favors weakness but near-term correction may be in the cards
The Australian Dollar has dropped to the lowest level in over six months against its US counterpart following the FOMC monetary policy announcement. The pair appears to have resumed the down trend launched in early November but year-end flows may stymie near-term follow-through.
From here, a daily close below the 50% Fibonacci expansion at 0.7291 paves the way for a challenge of the 61.8% level at 0.0.7236. Alternatively, a move back above the 38.2% Fib at 0.7346 sees the next upside barrier at o.7415, the 23.6% expansion.
Partial profit on short AUD/USD trade set to trigger at 0.7420 has been taken after prices hit the initial target at 0.7346. Remaining exposure continues to be in play, looking to capture any follow-on weakness. The stop-loss has been adjusted to the breakeven level.
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