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Forex Strategy - AUD/USD Extends Declines Post Bearish Engulfing Formation

Forex Strategy - AUD/USD Extends Declines Post Bearish Engulfing Formation

David de Ferranti, Currency Analyst

Talking Points

  • AUD/USD Technical Strategy: Shorts preferred
  • 0.9085 mark remains key resistance level (see daily chart)
  • Bearish Engulfing pattern results in further declines

The Bearish Engulfing pattern on the four hour chart noted in yesterday’s candlesticks report has resulted in continued declines for the AUD/USD. The move lower comes following a test of the 0.9075 mark on some better-than-expected employment figures for Australia yesterday. Buying support may emerge near the 0.8890 mark.

AUD/USD: Bears Emerge

Forex_Strategy_AUDUSD_Extends_Declines_Post_Bearish_Engulfing_Formation_body_Picture_2.png, Forex Strategy - AUD/USD Extends Declines Post Bearish Engulfing Formation

4 Hour Chart - Created Using FXCM Marketscope 2.0

It should also be noted that the recent recovery for the Aussie has resulted in a Hammer candlestick formation on the daily chart. While technically a bullish reversal signal, significant selling pressure remains at the 0.9085 mark which may continue to cap gains for the currency.

AUD/USD: Hammer Sees Little Follow-Through

Forex_Strategy_AUDUSD_Extends_Declines_Post_Bearish_Engulfing_Formation_body_Picture_1.png, Forex Strategy - AUD/USD Extends Declines Post Bearish Engulfing Formation

Daily Chart - Created Using FXCM Marketscope 2.0

By David de Ferranti, Market Analyst, FXCM

Follow David on Twitter: @Davidde

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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