Pair: AUD/USD
Long or short: Short
Timeframe: 1-hour
Chart:
Trade rationale:
The Aussie rally seems to be over as traders might want to close out their positions after the recent FOMC decision. It also looks like risk aversion is back in the markets as higher-yielding currencies reacted negatively to weaker than expected U.S. data.
On the 1-hour timeframe, there’s a potential retracement play as the 61.8% Fib lines up with the area of interest at 1.0150. Stochastic is in the oversold zone which means that the pair could be ready for a pullback.
Trade details:
Short order at 1.0150, stop loss at 1.0225 (75 pips), profit target at 1.0000 (150 pips)
Reward-to-risk:
I’ll be risking 1% of my account on this trade and the R:R is 2-to-1.