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Talking Points

  • AUD/USD Technical Strategy: Pending Short
  • Dark Cloud Cover Formation Warns Of A Correction
  • Recovery Doubtful Despite Test of Key Support

The Australian Dollar’s retracement of its recent gains has yielded a Dark Cloud Cover formation, warning a further pullback for the currency. The bearish pattern is the third in the space of a month and may herald another decline to the range-bottom at 0.9320. However, some skepticism over the potential for further follow-through may be warranted given the choppiness of recent price action.

AUD/USD: Dark Cloud Cover Pattern Warns Of Pullback To Range-Bottom

AUD/USD Dark Cloud Cover Offers Ominous Warning Near Range-Top

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

A Hanging Man on the four hour chart offered an early warning signal of a potential correction over the session. While the 0.9400 handle has seen some buyers emerge, the absence of bullish reversal signals casts doubt over a recovery.

AUD/USD: Teasing At Key Support With Reversal Signals Lacking

AUD/USD Dark Cloud Cover Offers Ominous Warning Near Range-Top

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

By David de Ferranti, Currency Analyst, DailyFX

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