AUD/USD Technical Strategy: Shorts preferred on bounce
Bullish engulfing pattern results in recovery for the Aussie
Downtrend intact on daily supports overall bearish bias
The Bullish Engulfing candlestick pattern on the hourly chart for the AUD/USD has resulted in a short-term recovery for the pair. However the bulls appear to be struggling to hold onto their grip on the Aussie around 0.8920/0.8930 as sellers appear to be restraining further gains.
A spike in volatility is easily visible on the hourly chart today following the March rate decision from the RBA. However, there remains an absence of a notable key reversal pattern that could warn of fresh declines on the shorter-time frames. This is in contrast to the daily chart which is suggesting that a downtrend has emerged and places the longer-term technical bias to the downside. Against this backdrop, intraday bounces may be seen as an opportunity to enter new short positions.
