AUD/USD looks tired and Friday’s non-farm payrolls report could be just the thing to stomp out the fading rally.
We saw a 100 pip intraday reversal on Thursday and that has set up an inverted hammer pattern.
We also draw your attention to the slow Stochastic, which is deep into overbought territory with the signal line threatening to cross over.
By any measure, AUD/USD is overbought. We have seen a rise in 8 of the past 12 sessions and all the down days were negligible until Thursday.
The short-term chart also looks like it’s setting up for a big move.
We’re seeing a classic consolidation pattern after a sharp reversal. The range is very tight at the moment, with 0.9180 and 0.9160 as the parameters. Any break is a short-term ‘go with’ but on the top side we would take profits quickly and look for a level to be a better seller. On the bottom, we would hold on through Friday’s non-farm payrolls and look to hit a home run as AUD/USD falls back to 0.8750 or lower.