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Forex Strategy: AUD/USD Struggles As Bearish Engulfing Pattern Forms

Forex Strategy: AUD/USD Struggles As Bearish Engulfing Pattern Forms

David de Ferranti, Currency Analyst

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Talking Points

  • 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.

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

Forex_Strategy_-_AUDUSD_Struggles_As_Bearish_Engulfing_Pattern_Forms_body_Picture_2.png, Forex Strategy: AUD/USD Struggles As Bearish Engulfing Pattern Forms

4 Hour Chart - Created Using FXCM Marketscope 2.0

Forex_Strategy_-_AUDUSD_Struggles_As_Bearish_Engulfing_Pattern_Forms_body_Picture_1.png, Forex Strategy: AUD/USD Struggles As Bearish Engulfing Pattern Forms

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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