I’ve been speaking a bit about the AUD/USD over the last few days as I’ve felt it is looking like a good short. We recently pulled back to the 0.7850 level and have found our way back down to the key 0.7800 support.

This is a big level and it looks like we might break it. That’s great news because it is offering us an excellent risk/reward.

The next swing low is not until 0.7600, so we are risking 0.0050 to make 0.0200. That’s 4:1 or thereabouts. Not a bad setup. Of course, we have to hold below the 0.7800 level and there is NFP tonight which could make the USD tank, so keep that in mind.

AUD/USD – 240min Chart.