The pair has been pulling back significantly over the last 2 weeks after a significant breakout of a long term rising trendline. The Aussie might be under pressure going forward considering the overall market shift towards risk aversion.
We have seen a shy test of the daily 20 moving average on this 50% retracement move which gave a good opportunity for the market participants to come back short on the pair. A double top formation on the weekly chart is probably taking shape and a new acceleration below parity would definitly validate a long term reversal structure.
We still have to be careful though while considering short opportunities on the high yield currencies like the Aussie. Despite the fact we have to pay a significant amount of overnight rollover fees (considering the high interest rate differential), we are exposed to the come back of the bulls looking for bargain prices.
