On Thursday, I highlighted the risk of a double top at the 50% retracement in AUD/USD and that has unfolded in rapid fashion. The pair is down 125 pips today and now about 100 pips away from completing the round trip to 0.6824.
That May low is currently the worst since June 2020.
There's plenty of room on the downside if we get there. The pandemic low was 0.5516. You'd have to imagine we're in a brutal global recession -- including some kind of covid disaster in China -- if we're talking about those kinds of levels.
Given the unlikelihood of that, I like buying AUD/USD near the bottom of this range for at least a bounce. Nothing moves in a straight line forever. If you've missed this rout, I don't think it's time to chase. The next trade will be to buy the dip but it may have to wait until Powell.
