Forex Strategy: AUD/USD Struggles As Bearish Engulfing Pattern Forms
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- AUD/USD Technical Strategy: Shorts preferred
- 0.9085 mark remains key resistance level (see daily chart)
- Bearish Engulfing pattern needs confirmation
A Hammer formation on the four hour chart near 0.8890 helped foreshadow a bounce for the AUD/USD in recent trading. However a Bearish Engulfing candle pattern that is presently emerging at 0.9075 is warning of a correction for the pair. It should be noted that the second candle in the pattern still needs to close and receive confirmation from a successive down period before being validated.
Also noteworthy is the Hammer formation on the daily chart that has resulted from the recent recovery for the Aussie. While technically a bullish reversal signal, significant selling pressure remains at the 0.9085 mark which may cap gains for the currency.
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4 Hour Chart - Created Using FXCM Marketscope 2.0
Daily 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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