It’s been on the cards all day but now we have the break in AUDUSD
The 0.7625/30 level is no more as we hit a low of 0.7616.
The question now is whether this break is real or fake and that answer will be determined by the price action to follow. At the moment, we’re seeing resistance around 0.7620/25, as we might have been expecting from the break here.
Longs who might have leaned against the lows as support might just still be in the game due to the lack of a real follow through, while break shorts will want to see this area hold to confirm the break. Trading this level still warrants tight stops. If we gain back 0.7630, this move may just cement the support down here. If not, we’re on for a test of 0.7600.
For me, the lack of a follow through could be telling as it means the sellers perhaps aren’t really that keen, or perhaps they’re overstretched from the selling since Friday. On the flip side, the buyers aren’t rushing in to give shorts a bloody nose either. Guessing which way it might go is folly so all we can do is watch the price action and trade where it goes.