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Current AUDUSD positioning is within a hair of major support at 0.9338, the 23.6% Fibonacci retracement of the 08/17/07-07/15/08 rally. Price action has been held above this level since mid-April. Fundamentals are supportive of a bearish bias. Today saw TD Securities Inflation ease for the first time in almost a year, printing at 4.6% in the year to July versus 4.8% in June. The release suggests that record-high interest rates are having the desired disinflationary effect, meaning RBA policymakers could have room for a rate cut sooner rather than later. A major selloff may be imminent should the greenback derive enough strength from tomorrow's NFP release to break and close past Fib support.
Strategy: Short AUDUSD on a daily close below 0.9338. Set stop-loss at 0.9497. Target the 38.2% Fib at 0.9018.
Ilya
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