Forex Strategy: AUD/USD Breaks Above 0.9160 With Reversal Signal Absent
- AUD/USD Technical Strategy: longs preferred on breakout
- Dragonfly Doji on the four hour chart resulted in an intraday bounce
- Absence of bearish reversal pattern opens continued advance
The Australian Dollar has pushed above the key 0.9160 resistance level in recent trading with sellers capping further gains for the currency at the 0.9200 mark for the time-being. While a Bearish Engulfing formation had warned of declines for the Aussie, it failed to receive confirmation from a successive session of declines. With a key reversal candlestick pattern now lacking on both the daily and four hour charts, the AUD/USD may advance on 0.9340 (61.8% Fib Retracement Level) if a breakout above 0.9200 occurs.
AUD/USD: Break above 0.9200 May Open 0.9340
Daily Chart - Created Using FXCM Marketscope 2.0
The Dragonfly Doji near the 0.9000 support level on the four hour chart helped indicate the potential for a bullish reversal for the AUD/USD. The Doji now forming near 0.9200 suggests some hesitation amongst traders, yet a successive down period would be needed before suggesting a potential reversal.
AUD/USD: Dragonfly Doji Foreshadowed AUD/USD bounce
4 Hour Chart - Created Using FXCM Marketscope 2.0
By David de Ferranti, Market Analyst, FXCM
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