Forex Strategy: AUD/USD Hammer Plays Out With Extended Gains
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- AUD/USD Technical Strategy: Piercing Line favors upside gains
- An Evening Star pattern failed to get confirmation from a break below support
- Bearish reversal candlestick formation with follow-through needed before offering a bearish bias
The sharp move higher for the AUD/USD in recent trading arose following a Hammer candle formation on the 4 hour chart. The pair has now recovered by roughly 250 pips since the formation of a Piercing Line candle pattern near the 0.8700 handle.
However, with sellers likely sitting around the psychologically significant US 90 cent level further gains may be limited. The presence of a bearish reversal candlestick close-by the key resistance level would likely present a short-term selling opportunity with a potential target of 0.8900.
Confirm your chart-based trade setups with the Technical Analyzer.
Four Hour Chart - Created Using FXCM Marketscope 2.0
--- Written by David de Ferranti, Market Analyst, FXCM
Contact and follow David on Twitter: @Davidde
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