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Today’s Trading Edge: AUD/USD – U.S. Treasury Yields Keep Fueling Aussie Slide

Posted by Edward Moya on Sep 10, 2014 4:21:00 AM

WWM AUDUSD SEP 10 2014

AUD/USD continued its losing streak for a third consecutive day as investors continue to rush to buy U.S. dollars and as U.S. Treasury yields continue, with the 10-year yield breaking out above 2.50% after trading as low as 2.30% at the end of last month.   The recent surge in yields is being triggered by traders moving up their interest rate hike forecasts for the Federal Reserve. 

Two weeks ago, I targeted Aussie weakness from both trendline resistance and a potential bearish butterfly pattern.  Price did respect my stop of .9410 and fell through my initial target and is now trading well below the 200-, 100-, and 50-day Simple Moving Averages (SMA). 

Major support for the Australian currency might target the .9080 level, which is where a bullish Gartley pattern may form.  A daily close below .9050 will invalidated the pattern and could open the door for another 1.0% slide.  Key resistance will come from the .9200 handle which is currently just above 200-day SMA.      

The trade: Sell AUD/USD at .9180 with a stop loss at .9240 and a take profit at .9060.  The Risk/Reward Ratio is 1:2

Edward J. Moya

Technical Strategist

WorldWideMarkets Online Trading

Topics: AUDUSD, aussie, aud, Aussie Dollar, aussie trading

 

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