A Potential Pullback Buy In The AUD/USD
Shain Vernier • 1 min read
For the session, retracement is the rule across the majors. In the wake of yesterday’s post-FOMC selloff, the USD has gained back much of its value. Strength against the Swiss franc, Euro, and Japanese yen have cut Wednesday’s losses. However, the Aussie is grinding higher, extending gains of the three previous sessions.
With at least a moderate reversion back to the mean, the market looks to have priced the quarter-point hike in the USD correctly. The action has given us a rational forex and a possible pullback buy in the Aussie.
The AUD/USD has been hot lately, up big for the week.
There is no reason to doubt the relative strength of the AUD at this point. Technicals are bullish for the intermediate term and an end-of-year buyback looks to be in full swing. This could be a great time to go long from valid support.
Today’s support levels:
- Support(1): 38% retracement of current wave, .7608
- Support(2): Bollinger MP, .7604
- Support(3): 20 Day EMA, .7593
- Support(4): Daily SMA, .7590
Bottom Line: As of this writing, the AUD/USD is trading near .7650, far above support. I will be going long from .7611 with an initial stop beneath the Daily SMA at .7574. This is a 1:1 R/R trade that produces 37 pips.
Normally, this scenario would be good until the market closes today. However, as long as today’s intraday high of .7674 holds, it will remain in play. If the intraday high is extended, then the long trade will be valid until the forex close.