AUD/USD SELL Recommendation Issued @0.8515

IT MAY NOT GET THERE; BUT WE WILL BE WAITING IF IT DOES

Aud/Usd: Although the Australian economy has performed quite well throughout the global economic downturn, we contend that the recent appreciation in Aussie is nevertheless overdone and due for some corrective action. There have been a number of concerns with regard to Chinese growth prospects, and with the Australian economy so connected, any fallout in China ultimately should weigh on Aussie. Technically, we view the 0.8500 psychological barriers as a formidable spot to look to establish a short trade should the market run up to test the level. Any gains beyond should be limited and we look for a double top type formation to play out on the daily chart, with a near-term break back below neckline support at 0.8180 to open a measured move drop below 0.8000. STRATEGY: SELL @0.8515 FOR AN OPEN OBJECTIVE, STOP @0.8715. RECOMMENDATION TO BE REMOVED IF NOT TRIGGERED BY NY CLOSE ON FRIDAY.

Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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