Last Friday we opened a sell forex signal in AUD/USD. This pair has accelerated the downtrend since the Australian retail sales came out negative last week.
So, we have played the downtrend in this pair last week with a couple of sell signals which closed in profit. We have seen a similar pattern in NZD/USD, so we have played the short side on this side as well.
So, last Friday, we decided to go short on the Aussie as this pair was retracing higher in the evening. The price had just reached the 20 SMA on the H1 forex chart, which was supposed to provide resistance and stochastic became overbought.
Previous support turned into resistance
The Kiwi opened with a 40 pip gap lower last night after the general elections in New Zealand, but it didn’t affect the Aussie though, which would have been a bonus for us. If the roles reversed and suppose there were elections in Australia, the NZD would take notice.
Anyway, we have the Chinese services which came to our rescue. The Chinese Caixin Services PMI lost more than two points tonight which brings this sector close to contraction. Services are not that important in China, at least not as important as manufacturing, but they will have some impact on the demand for raw materials.
The Aussie took notice of the data and turned lower after that. The decline has been slow so far but at least we’re in the right direction, so let’s hang on because we will surely get there.
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