AUD/USD had been trading inside an ascending triangle chart pattern for quite some time before breaking to the downside and indicating that further losses could be in the cards. Price has found a bit of support at the .9300 area and may be due for a pullback, as stochastic is starting to move out of the oversold zone.

With that, price could retreat to the .9400 major psychological handle, which is near the broken triangle support. From there, if selling pressure remains strong, AUD/USD could resume its drop and head back down to the lows near the .9200 levels.

Shorting at .9400 with a stop above the top of the triangle or .9460 and a target of .9200 could yield a good return on risk for a medium-term trade.

By Kate Curtis from Trader’s Way