Going Short From the 20 SMA in AUD/USD Proved to be Correct, as it Turned Into Resistance
[[AUD/USD]] has been pretty bullish for the past week or so, climbing more than 200 pips as the sentiment in financial markets turned positive, due to the Brexit deal and the partial US-China deal. As a result, this pair moved above all moving averages on the H4 chart.
But, Boris Johnson’s Brexit deal didn’t pass the British Parliament in the “meaningful vote” on Tuesday, which dented the sentiment in financial markets. Risk assets such as the Aussie retreated lower in the following sessions and after finding some soft support at the 20 SMA (grey) on the H4 chart, the price slipped below it eventually.
Yesterday during the US session, the price was retracing higher on this time-frame and before going to bed, I decided to sell the retrace in this pair. AUD/USD had retraced to the 20 SMA on this chart, which was providing resistance.
I wasn’t very sure about this trade since the retrace higher wasn’t complete on this chart, as stochastic shows, but I woke up this morning to see that this pair had reversed back down. Now we are well in profit with this forex signal and the price is heading for the 200 SMA (purple), so we’re holding on to this trade.
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