Forex Strategy: AUD/USD Continues Gains Post Hammer Formation

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Talking Points

  • AUD/USD Technical Strategy: Hammer formation favors continued upside gains
  • Sellers may emerge important 0.9085 level which is the high for 2014
  • Bearish reversal candlestick formation with follow-through needed before offering a bearish bias

The Aussie has extended its recent gains as it marches towards the 91 US cents handle. The extension higher for the AUD/USD follows a couple of bullish candlestick patterns on the four hour chart including a Piercing Line formation as well as a Hammer.

With a bearish reversal candle pattern seemingly absent, it leaves the bias in favor of continued upside gains. A break above noteworthy resistance at the 2014 high of 0.9085 may open up the December 2013 high of 0.9170. However, if a reversal signal emerges with selling pressure at the 0.9085 mark, a short entry may be provided.

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Forex_Strategy_AUDUSD_Continues_Gains_Post_Hammer_Formation_body_Picture_1.png, Forex Strategy: AUD/USD Continues Gains Post Hammer Formation

Four Hour Chart - Created Using FXCM Marketscope 2.0

--- Written by David de Ferranti, Market Analyst, FXCM

Contact and follow David on Twitter: @Davidde

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