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Forex Strategy: AUD/USD Bullish Engulfing Pattern Suggests Bounce

Forex Strategy: AUD/USD Bullish Engulfing Pattern Suggests Bounce

2014-03-03 11:49:00
David de Ferranti, Currency Analyst

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Talking Points

  • AUD/USD Technical Strategy: Shorts preferred on bounce
  • Bullish engulfing pattern hinting at a short-term recovery
  • Downtrend intact on daily supports overall bearish bias

The Bearish Engulfing pattern noted in the last AUD/USD candlesticks report has resulted in continued declines for the pair. The bulls appear to be prepared to offer support at 0.8890 in intraday trade with a Bullish Engulfing pattern on the hourly hinting at a short-term bounce.

However given a downtrend on the daily timeframe, a strengthening of the Aussie would be seen as an opportunity to enter new short positions. The 23.6% Fib Retracement level pictured below is likely to offer some resistance.

It is also noteworthy that the upcoming RBA rate decision is likely to create intraday volatility for the AUD/USD. You can check the calendar here to view upcoming event risk for the week.

Confirm your chart-based trade setups with the Technical Analyzer.

Forex_Strategy_AUDUSD_Bullish_Engulfing_Pattern_Suggests_Bounce_body_Picture_1.png, Forex Strategy: AUD/USD Bullish Engulfing Pattern Suggests Bounce

Hourly 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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