AUD/ USD initially tried to rally during the session on Tuesday, but was cut short and reversal and the 1.0470 level. The resulting candle was a shooting star, and it did break the bottom of the hammer from the Monday session. While it didn’t completely break support, it does mean that something significant happened. In fact, it does look like the downside is probably more likely at this point because of the action that we saw on Tuesday.
We do see a lot of choppiness in the short-term though, and as such we aren’t necessarily too excited about shorting at this point. In fact, this is a pair they can probably be left alone as there are hammers and shooting stars within a very tight range over the last five or six sessions, normally a sign of mass confusion.
Written by FX Empire