FX Market Commentary: AUDUSD Breakout Pullback Setup | May 7th

AUDUSD – Targeting the Yearly Lows
Rumor-ville has it Soros was selling about a yard against the Aussie in anticipation of a rate cut. Funny how things change as a yard doesn’t move pairs like it used to. The RBA did an unexpected cut after all (except to the prescient Soros), and the pair has lost just shy of 200 pips in the last two days. This has taken out the key level at 1.0221 which held the pair up for two weeks.

This should offer traders a breakout pullback setup as I’m guessing Soros is either a) not going to let his foot off the gas, or b) will not just yank his positions all at once (virtually impossible for him). I’m also guessing other traders are not thinking to buy the pair after the rate cut, so am expecting lower prices.

So watch for pullbacks into this level, targeting the yearly low at 1.0115.

breakout pullback setup audusd price action 2ndskiesforex.com

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  • Tino

    Maybe we should be careful here. PA was in a wide daily range between 1.0594 and 1.0155 from July 2012 and is now testing the low of the range.

  • Steve

    Excellent analysis Chris, has passed under 1.0155 and currently trading at 1.0085. Has now broken below daily S/R of roughly 1.0190 dating back to June 2012. Any ideas for strategy here? Another pullback maybe and then where?