The AUD/USD pair initially rose well above the 1.08 level on Wednesday as the flag we have been watching got violated. However, by the end of the session, these gains were lost and more, to form a bit of an engulfing bearish candle. The 1.08 level looks to have held, and now the flag is no more. The 1.06 level below should be supportive, and it looks like the pair should continue to fall. The breaking of 1.0850 now needs to be seen in order for longs to be taken at this point, and it should be noted that gold lost 5% during the session, which of course tends to run parallel to this pair. We are shorting a break of the low from Wednesday, and would look for a short-term fall.
Written by FX Empire