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Forex Strategy: AUD/USD Awaits Confirmation of Bearish Reversal Signal

Forex Strategy: AUD/USD Awaits Confirmation of Bearish Reversal Signal

David de Ferranti, Currency Analyst

Talking Points

  • AUD/USD Technical Strategy: sidelines preferred
  • Dragonfly Doji on the four hour chart resulted in an intraday bounce
  • Bearish Engulfing pattern on the daily awaits confirmation

The Bearish Engulfing pattern that has arisen following the AUD/USD’s false break above 0.9085 is warning of further declines for the pair. However, the formation has yet to receive confirmation and against the backdrop of a short-term uptrend caution is suggested when looking at shorts.

AUD/USD: Bearish Signal Awaits Confirmation

Forex-Strategy-AUDUSD-Awaits-Confirmation-of-Bearish-Reversal-Signal_body_Picture_2.png, Forex Strategy: AUD/USD Awaits Confirmation of Bearish Reversal Signal

Daily Chart - Created Using FXCM Marketscope 2.0

As noted in yesterday’s candlesticks report the Dragonfly Doji on the four hour chart was hinting at a bounce during the session which continues to stand. Expect further gains to be met by some selling pressure at the psychologically significant 0.9100 handle.

AUD/USD: Dragonfly Doji Foreshadowed Intraday Bounce

Forex-Strategy-AUDUSD-Awaits-Confirmation-of-Bearish-Reversal-Signal_body_Picture_1.png, Forex Strategy: AUD/USD Awaits Confirmation of Bearish Reversal Signal

4 Hour 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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