AUD/USD Closed the Second Weekly Bar as a Bearish Hammer – The Drop Is a Matter of Time

It was especially important to follow how the second bar on the weekly time frame would close.

As you can see, the two bars are almost identical and are unambiguous signals for future drop, although today the pair moved correctively to the upside. As it is, that move to the upside reached the resistance at 0.7640, marked by the middle line of the Bollinger Bands indicator on both the four-hour and the daily time frames, which means that said level is a very strong resistance level and in my opinion this is a good place to open short positions, considering the expected bearish movement.

If the pair does start dropping we can expect a strong support at 0.7450.

On the other hand, if move to the upside continues for the moment AUD/USD will possibly first test the resistance trendline (the purple line), in which case I expect it to form a slightly bullish sideways consolidation.