USD weakness following the Fed's dovish statements have produced a sell set up in AUD/USD. Despite significantly lower iron ore prices (Australia's number 1 export) the AUD has proved resilient. However, the impact on the terms of trade of lower export prices should be reflected in a lower AUD - at some stage.
That's why this set up is attractive:
The double top around 0.9430 is accompanied by a turning slow stochastic. A cross of the stochastic lines above 80% is considered significant. While the slow stochastic is not generally reliable as a stand alone indicator, the combination with a double top formation enhances the signal.
The targets for this trade is near the bottom of the recent range at 0.9200. However, the recent support at 0.9325 will warrant close watching should the slide begin.