AUDUSD faces downward pressure as Westpac unveils $2.5 bln rights issue

The Westpac $2.5 bln rights issue came out a bit over an hour ago which is linked so take a look. I posted a short setup on the AUDUSD pair earlier today over on TradingView on top of my mention yesterday that the rally has exhausted in an earlier post

I posted this sell signal over on TradingView earlier today and actually took the trade myself. I rode it to an +137 pips gain, but missed the last push lower.

AUDUSD 1-Hour
AUDUSD 1-Hour

After the trend-line break, we had a few bars of upticks marking sellers covering their positions. However, the 9-period rally was just too significant and this led to more sellers unloading. I do not believe this sell-off is over.

AUDUSD 1-Hour
AUDUSD 1-Hour

Using the Fibonacci retracement tool, I was able to plot the zone between the 40% to 50% retracement zone. This zone is also a critical zone. By this, I simply mean that it is a resistance turned support zone. Rather than being dead set on whether this will be a future support or resistance zone, I’ll leave it as a critical zone where further price action near this zone must be observed.

Right now we are experiencing a slight cover period as short term sellers close out their positions. Once again, I don’t believe this move is over and the momentum is still present at least until we near the 40% retracement level.

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