Followup 2 – BEOB AUD/USD 11/16/12

After retracing a bit yesterday, AUD/USD has continued its move down. It is meeting strong support at the first trouble area (FTA) we pinpointed two days ago, 1.0300. In fact, the low of the current bar was 1.03003!

The question now is whether that level will hold. Price might move back up, or it might manage to break down below 1.0300. If it breaks below 1.0300, it is likely that that level will change from support to resistance. Price pivot zones (PPZ), once breached, often switch from being support to being resistance and visa-versa. So it if goes below the PPZ, we might see a small retracement back up to 1.03, followed by another move down as shown on the chart. If that happens, look out. There is now a lot of room for AUD/USD to fall further.

If you are still in this trade, you might want to consider moving your stop loss down. Above the current bar, around 1.0350, might be a good place to move it.