After forming a death cross signal on September 9th, the bear market move was confirmed and price declined steadily from .9300 all the way down towards .8642. It is around that key low that price has tentatively formed a bullish double-bottom pattern that coincided with the low made at the beginning of the year.
The daily chart for AUD/USD displays the recent respect of the .8900 level has forced price to consolidate around the .8770 region. Downward pressure concerns for the pair may hinge on whether or not we see another round of US dollar buying. The concerns for weaker economic growth in Europe and the US may support continued safe-haven flows that could benefit USD bulls. As long as .8620 holds, we may see upside target the .9000 handle.
The trade: Buy AUD/USD at .8770 with a stop loss at .8670 and a take profit at .8970. The Risk/Reward Ratio is 1:2
Edward J. Moya
Technical Strategist
WorldWideMarkets Online Trading
