The AUD/USD pair had a positive session on Thursday, but did pare back some of the gains as it breached the 1.03 level. The fact is that in front of the nonfarm payroll Friday, very few traders are willing to hold onto risk overnight. With this being said, we have formed the second shooting star in a row on the daily chart now. This does suggest that perhaps the price will fall, but we certainly will not take a trade before the nonfarm payroll number comes out.
In fact, it does seem more comfortable to short this pair below the parity level, which is where it launched from last Friday as for buying this pair, a supportive candle between here and the parity level could be used, or a breaking of the highs from the Thursday session. A breaking through the top of a shooting star is indeed a bullish signal, and as such we would treat that as an entry. We suspect that the upside will run into trouble at the 1.04 level, but it will simply be a stepping stone on the way to 1.08 or so.
Written by FX Empire