Tuesday’s signals for the AUDUSD pointed lower and these were confirmed with a 2nd strong down-day in a row and a loss of 1 Big Fig on the day.
1) This week’s selling has come from close to a weekly bear trend as well as from close to the 50 & 100 day average rates.
2) Tuesday’s losses have broken the neckline to a bearish Head & Shoulders top, a pattern of 3 failed rallies which has an ultimate target at .8950. Along with this the 200 day average has been broken overnight.
3) However, broken necklines are often re-tested and this level is at .9245, and with intraday sentiment oversold the potential for a temporary bounce is high.
4) Call – stay short, sell modestly on the open and at .9190 with a stop loss at .9224, today’s high, though ideally if you can afford a stop at .9245 that is more suitable as a tech level.
5) Targets are to .9100 and .8950, the H&S projection.
