I went short on Friday night and I added to this position after the unconvincing price action above 1.0500. This is something which is hard to explain, but when you follow the market very closely there are times when it just feels wrong and that’s what I think the case is at the moment. Interest rates are falling, China’s economy is stuttering and the US QE is already written into the market; surely a strong case to be selling AUD/USD. A lot will of course depend on what the Sovereigns and real money funds do; if they keep buying then the AUD will struggle to fall.
If I’m right, then I think we should see a test of 1.0270 this week (https://www.tradingview.com/x/Ed4tRWzp/) where a 61.8% retracement sits. This level has operated as a pivot on many occasions over the past 2 years and I think it will do so again. Resistance should now be very solid at 1.0520.