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AUD/USD: Are We Witnessing The Start Of A Continuation Lower?

Published 25/11/2014, 12:05

Looking at the weekly chart indicated that the past couple of weeks Price has been hesitant to continue lower. In-fact looking back along this level one will notice that Price had indeed paused at this exact spot in the past. The start of this year infact. So we would need to take note of that level which on a weekly chart stands around 0.86651.

The past couple of weeks has seen Price falling lower during the early part of the week BUT by the close of play on Friday the candle had closed higher. All these closes occurring at a Major support level. This has formed a number of Hammer like candlesticks which are a bullish setup representation. We tend to see these candlesticks forming around the end of a negative trend. This has been the case as Price has fallen aggressively recently after a prolonged period of consolidation around the 0.94275 level.

The only candlestick formation that will cancel out these 'bullish' candlesticks is a bearish engulfing candle. So a weekly candle closing lower than the current low point which stands around 0.85285. As it stands right now the weekly candlestick is testing this level. IF by the end of Friday we have a bearish engulfing candle close lower this would offer a potential entry level and a 1st target level around 0.79268 would be a valid long term target.
AUD/USD Weekly chart 23rd - 29th November 2014

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