Shorting AUD/USD at the 20 SMA

AUD/USD has been bearish since early January and moving averages are keeping it that way

Skerdian Meta•Tuesday, February 11, 2020•1 min read

The 50 SMA is acting as resistance again

[[AUD/USD]] was pretty bullish throughout December, as the USD had a bad month back then, after US ISM manufacturing dipped further in contraction. The year end cash flows which went against the USD as well also helped this pair climb higher towards the end of the year.

But, the sentiment reversed in the first week of January after the tensions between US and Iran and risk assets such as Commodity Dollars turned bearish. The sentiment turned even more negative after the coronavirus outbreak in China, which has been keeping AUD/USD bearish.

Moving averages have turned from support into resistance, with the 100 SMA (green) providing resistance during pullbacks at first, then the 50 SMA (yellow) and 20 SMA (grey) took things on their hands. In the last two days, we have seen a retrace higher, but that ended just below the 50 SMA, as seen on the H4 chart above. So, this pair remains pretty bearish, despite the pullback higher, which is a good opportunity to go short.

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ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.