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AUD/USD Dark Cloud Cover Delivers Dramatic Decline

AUD/USD Dark Cloud Cover Delivers Dramatic Decline

2014-07-04 09:25:00
David de Ferranti, Currency Analyst
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Talking Points

  • AUD/USD Technical Strategy: Shorts Preferred
  • Dark Cloud Coversignals potential for continued pullback
  • Piercing Line on four hour chart hints at an intraday recovery

The Australian Dollar has been quick to retrace its hard-fought gains with the currency plunging back below the 0.9440 mark in trading this week. A spike in retail trading volume alongside a Dark Cover Pattern offers an ominous warning for a continued decline. However, follow-through at this stage has been limited with a Doji forming on the daily, suggesting some hesitation by the bears. Buyers are likely to emerge at the 0.9210 mark.

AUD/USD: Dark Cloud Cover Offers Ominous Warning

AUD/USD Dark Cloud Cover Delivers Dramatic Decline

Daily Chart - Created Using FXCM Marketscope 2.0

Examining intraday price action on the four hour chart a Piercing Line pattern paints a slightly different picture to the daily. The bullish reversal pattern hints at an intraday recovery, which may see sellers emerge at the 0.9385 mark.

AUD/USD: Piercing Line Pattern Hints At Intraday Bounce

AUD/USD Dark Cloud Cover Delivers Dramatic Decline

4 Hour Chart - Created Using FXCM Marketscope 2.0

By David de Ferranti, Currency Analyst, DailyFX

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