AUD/USD about to drop?

Fawad Razaqzada TradingCandles.com

Following Monday's noticeable reversal in the bullish trend for US indices, risk-sensitive currencies such as the commodity dollars will be in focus now.

If the stock market selling resumes today, then I would expect to see the likes of the AUD/USD and NZD/USD break lower and USD/CAD to push higher.

This is how the Nasdaq 100 chart looks:

If the above is a genuine reversal signal, then the AUD/USD looks juicy for the bears:

The AUD/USD created an inverted hammer on daily on Monday, tracking the reversal for major US indices. A few weeks ago, it had created a false break above its old high at 0.7032 and price has since struggled to go back above the 0.70 handle.

Given the above developments I think a correction looks likely. I would be wrong if we close above 0.70 on daily.

Author

Fawad Razaqzada

TradingCandles.com

Experience Fawad is an experienced analyst and economist having been involved in the financial markets since 2010 working for leading global FX, CFD and Spread Betting brokerages, most recently at FOREX.com and City Index.

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