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Forex Strategy: AUD/USD Bounce To Offer New Entries On Shorts

Forex Strategy: AUD/USD Bounce To Offer New Entries On Shorts

2014-03-04 06:26:00
David de Ferranti, Currency Analyst

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Talking Points

  • AUD/USD Technical Strategy: Shorts preferred on bounce
  • Bullish engulfing pattern results in recovery for the Aussie
  • Downtrend intact on daily supports overall bearish bias

The Bullish Engulfing candlestick pattern on the hourly chart for the AUD/USD has resulted in a short-term recovery for the pair. However the bulls appear to be struggling to hold onto their grip on the Aussie around 0.8920/0.8930 as sellers appear to be restraining further gains.

A spike in volatility is easily visible on the hourly chart today following the March rate decision from the RBA. However, there remains an absence of a notable key reversal pattern that could warn of fresh declines on the shorter-time frames. This is in contrast to the daily chart which is suggesting that a downtrend has emerged and places the longer-term technical bias to the downside. Against this backdrop, intraday bounces may be seen as an opportunity to enter new short positions.

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

Forex_Strategy_AUDUSD_Bounce_To_Offer_New_Entries_On_Shorts_body_Picture_5.png, Forex Strategy: AUD/USD Bounce To Offer New Entries On Shorts

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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