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Faraday: Shorting AUD as bears regain control

Alex Joyner from Faraday has spotted an opportunity to short the Aussie after negative momentum has gathered pace on negative data from China, which may prompt the Reserve Bank of Australia to introduce further rate cuts.

After moving higher last week, Joyner says AUD bears have regained control after the MNI Chinese Business Sentiment Indicator dropped to 51.3 for September, down from 56.0 in August, causing the Aussie to fall by 0.32%

Looking at the daily chart, Joyner says the price action has now formed multiple bearish pin-bars at the top of a long-term descending channel which the pair has been trending downwards in since April. This also coincides with a key level of resistance at around 0.72, creating what he believes could be a good opportunity to short the Aussie with an attractive risk to reward ratio.

00:55 minutes
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