• AUD/USD has the makings for a 1:3 risk to reward trade to the downside. 
  • Bears will seek a deep Fibonacci retracement to the confluence of demand territory. 

AUD/USD has been correcting a small portion of the daily impulse.

In doing so, the price penetrated the early October highs to make way for at least a 38.2% Fibonacci retracement. 

However, there has been a meanwhile bid back to test the resistance structure to pick up some last-minute liquidity. 

The following is illustrating how bears could be positioning for a rin to the downside and beyond a 38.2% Fibo towards the 2020 Point of Control, (POC) and confluence zones. 

Daily chart

The daily chart is bearish with multiple failures within the supply zone.

Bears will be seeking a break of the latest support structure for the possibility to move the positing into a breakeven scenario targeting structure below. 

4-hour chart

Bears can look to short from the recent highs, with a stop above the structure and for a minimum 1:3 risk to reward target towards daily supporting areas, such as the confluence zones and POC. 

We have a series of confluence zones, which include the 50% and 61.8% Fibonacci retracements that marry with high demand areas, the 21-day moving average and prior support and resistance levels. 

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