Potential signal:
- I am a seller of this market if we are below the inverted hammer one hour after the Non-Farm Payroll announcement.
- A stop loss would be at the top of the inverted hammer. I would be aiming for the 0.6250 level below.
The Thursday session initially did send the Aussie dollar a little bit higher to try to recover against the US dollar But you can see that we had given back those gains rather rapidly as we tried to break above the 200 day EMA the 200 day EMA, is a large indicator that a lot of people pay close attention to by forming the candlestick that we have, which is an inverted hammer. I think we are setting up a very interesting spot here, as we are looking at a massive inflection point in this pair.
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The Non-Farm Payroll is on Friday
The non-farm payroll announcement during the trading session on Friday really sets up the Aussie for its next big move. If we turn around and rally above the inverted hammer, that is a very strong signal that we are probably going to go back towards the highs again near the 0.66 level. If we break down below the trend line and continue to drop below the inverted hammer, you're going to see a move down to the 0.635 zero level and then eventually the 0.6250 level.
The Australian dollar has been lackluster at best. And with that being said, I think you've got a situation where markets have been grinding, but it is a market that also is highly sensitive to what's going on in Asia. And of course, the US dollar is half of the equation. The US dollar has started to really strengthen as the Federal Reserve remains tight. If the jobs number really blows out the expected 106,000 jobs added, that could be the catalyst for starting to sell off, yes, again. This is a currency that I think could lead the way back to USD strength overall.
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