First impressions looking at my charts on the AUD/USD this morning are that if the 0.7040 level goes then we are on our way to 0.6950 with the 0.6900 level also shaping up as important, given that it represents the base of the upward sloping channel that has been in place since early March.
The way the hourly chart is looking i think the AUD/USD will be lucky to keep its head above 0.7040 until London comes in for the day and then i don’t hold out much hope for it. If we also take out 0.6900 then that opens the way for a move all the way back to 0.6620 which is also close to where we find the 50 and 100 DMA’s.
I am inclined to add to shorts on the break back below 0.7040 with a stop above 0.7100. Sell on rallies to 0.7120 with a stop above 0.7200. Stops on existing shorts should remain above 0.7200 for now but will be lowered once we take out 0.7040.
