AUD/USD Recovers Ground As A Piercing Line Pattern Awaits Confirmation

Talking Points

  • AUD/USD Technical Strategy: Shorts Preferred
  • Piercing Line Candlestick Formation Awaiting Confirmation
  • Dojis On The H4 Chart Denoted Fading Downside Momentum

The Australian Dollar has recouped some of its recent declines as a Piercing Line pattern takes shape on the daily. Critically, the key reversal formation awaits confirmation from the close of the current candle and a successive up day. Further, recent bullish candlestick patterns including a Morning Star have been met with little follow-through. This suggests some skepticism over a sustained recovery is warranted. Heavy selling pressure is likely to be encountered at the 90 US cent ceiling.

AUD/USD: Downside Risks Remain While Sub 0.9000

AUD/USD Recovers Ground As A Piercing Line Pattern Awaits Confirmation

Daily Chart – Created Using FXCM Marketscope 2.0, Volume Indicator Available Here

A parade of Doji formations on the four hour chart indicated hesitation from traders to lead the pair lower near 0.8855. Yet a void of bullish reversal signals may limit the scope for a recovery. Should a bearish candlestick pattern emerge it would be seen as a fresh selling opportunity given the context afforded by the daily.

AUD/USD: Dojis Highlight Hesitation From Traders Near 0.8855 Barrier

AUD/USD Recovers Ground As A Piercing Line Pattern Awaits Confirmation

4 Hour Chart – Created Using FXCM Marketscope 2.0, Volume Indicator Available Here

By David de Ferranti, Currency Analyst, DailyFX

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