AUDUSD short positions remain more rational but only after a slight adjustment

Forex AUDUSD Our expectations:

Long-term downtrend and retracement to Dynamic Resistance levels of DeM Sequential 0.7262, where a pin bar is formed. Ability to enter after price adjustment up to 50% or top of the pin bar with SL 0.7348.

Rebound from diagonal resistance and 2 closed bars under horizontal resistance suggest that for now the level is unbearable for the bulls.

The price remains below 200SMA, and breaking over 50SMA can easily be fake.

Pin bar at resistance levels / DeM Sequential Level / - Negative Signal.

Fundamentals:

Australia's latest retail sales data was well below expected and previous. The country's property market is also down, which is likely to negatively affect household spending as well. However, these signals still do not call a recession, but probably will be negative for the currency in the short term. Trade tensions between China and the US remain in place, which is an additional negative for AUD.

On the other hand, there are elections in the US, which may have led to profits taking from long USD positions, and that may be the reason for the latest sharp adjustment.

Alternative Scenario:

A closed bar above the top shadow of the pin bar and the DeM level will spoil the bearish scenario.

Read more:

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