Last week’s price action from the Australian dollar signals potential weakness ahead, but sellers need to watch this key level.
Watch today’s video to see how I’m trading AUDUSD this week!
AUDUSD is at risk of breaking down on Monday after failing to hold above the December trend line at 0.6380 last Thursday.
The pair tested the December trend line as resistance at the start of the week and is now down over 30 pips from that retest.
Last week’s failure to hold above 0.6380, followed by Monday’s retest, is a textbook buy-side fakeout, a pattern that has worked well for me over the years.
I missed the entry on Monday’s 0.6385 retest since it was nearly midnight my time, but AUDUSD could still offer a second-chance opportunity.
The February trend line comes in at 0.6365, which AUDUSD is now trading below.
If bulls fail to reclaim that level, the pair could move toward 0.6330 support and potentially lower.
Although 0.6330 is support for now, a sustained break below it on the high time frames would confirm another buy-side fakeout and expose lower levels.
Below 0.6330, I’m watching 0.6280 consolidation and the high time frame imbalance at 0.6220.
That said, 0.6330 remains support for now, so buyers are likely to defend it this week.
I entered short AUDUSD on Monday morning, a position I shared with VIP members in real time.
