To start off 2016, the AUD/USD has been under pressure and is likely to continue its course in the medium term; however, in our opinion, a slight pullback in the short term is favored as the pair finds support at the 161.8 percent fibonacci extension on the 4 hour time frame.
Indeed, the sharp decline has not seen a notable rally, which leads us to believe that at least a test of the 50.0-61.8 percent fibonacci retracement on the 0.7328 to 0.6925 down move could ideally happen to wave X before bears regain control.
As such, as long as prices stay above 0.6925 in the short term, market participants should not discount a near bull move before lower.
Bias: Long 0.6970 – 0.7025
Stops: 0.0.6920 – 06880
Target area: 0.71 – 0.7150
Global FX Club Team
AUD/USD Trade Setup