AUDUSD has broken rising trend line support guiding prices higher since late May against its US namesake, hinting the long-term down trend is resuming. The pair marked a top just below the 0.78 figure and found fuel for a breakdown in relatively hawkish comments from Fed Chair Janet Yellen.
Near-term support is at 0.7496, the 38.2% Fibonacci expansion, with a break below that on a daily closing basis opening the door for a challenge of the 50% level at 0.7415.
Prices are too close to near-term support to justify entering short at market from a risk/reward perspective. With that in mind, a short entry order has been established to sell the pair at 0.7597. If triggered, the position will initially target 0.7496 and than 0.7415. A stop-loss activate on a daily close above 0.7700 - 0.7760.
This trade can be correlated with a Long in NZDUSD but considering we are already in a correlation trade involving AUDJPY & NZDJPY we prefer to trade this pair as a pure directional swing trade.
Obviously with NFP due out this Friday at 8:30 am EST this trade will be greatly impacted by any surprise. With that said we will prefer to liquidate this position, if given the opportunity, ahead of the NFP release.