The AUD/USD pair fell during the session on Tuesday, as the initial surge through the 1.03 level gave way to the bearish side. The resulting candle was a shooting star, and this suggests that perhaps the Aussie dollar is ready to take of tumble. We have been watching the Australian dollar grant higher, and now it appears that we are trying to break through the bottom of an ascending channel. If this channel gives way, we think that this pair will find the parity level in the short term.
It is at the parity level that we think a lot of questions will be asked of this market. If we can get below parity, we look at that is a very bearish sign and should see this market falling to the 0.97 level at that point in time. Of course, we think that the parity could provide the support the bullish trader needs, and as such we need to look at the daily close once we get to that area.
Looking at this uptrend line, if we manage to break down below and we think this is a very bearish sign and would in fact it short of this market at that point in time. As for buying, we do not see the supportive candle we would like to have in order to do so. Buying blindly at this point in time is probably risky at best, and should be avoided.
Written by FX Empire