We’re Short on AUD/USD From the 20 SMA

The AUD/USD has been one of the most bullish pairs since march last year. It surged more than 23 cents from the bottom, climbing above 0.78 in the first week of January. Although, the highs started getting lower last month, and eventually the price turned bearish in the last week of January.

Moving averages did a great job as support during the uptrend, pushing it higher on the H4 chart, as shown above. But they were all broken last week, and the MAs turned from support to resistance.

At the end of last week we saw a pullback, which was sold off aggressively at the 50 SMA (yellow), while yesterday the AUD/USD was finding resistance at the 20 SMA (gray) during a second retrace. We decided to take a short on this pair, and now it seems like the retrace might be over, so let’s hope for a bearish continuation soon.