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AUD/USD Plausible for a Short Entry

The Australian economy is one of those developed economies currently facing significant macroeconomic headwind risk on the back of an escalated trade war – slowing housing and labor market is putting material pressure on the RBA for further monetary easing stimulus. The market is currently pricing in a rate cut in the Aussie for this year. In that light, the bullish retracement seen towards the end of last week sets up the AUD/USD for a plausible short entry in our opinion.

Technically, price is currently trading at a near-term significant area at the 0.69200 price level (see dash line) [see H1 Chart], we take this into consideration whilst shorting this instrument.

Fig 1: Hourly (H1) AUD/USD Chart

AUD/USD

Sell order @ 0.69190

Stop: 0.69411

Limit: 0.68800

Risk-Reward favors a downward move on the shorter term, however with this pair, a USD weakness changes the above outlook. It’s imperative that clients use a stop loss.

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