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The AUD/USD pair initially tried to rally for the week as we pierced the 1.05 level yet again. However, the selling pressure became strong at the 1.05 level and send this pair back down in order to form a shooting star. This looks very weak at this point in time, and in fact the daily charts saw this pair close below and ascending trend line.
Because of this, we believe that the poor economic numbers out of China are starting to weigh upon the Aussie dollar. With this in mind, we are willing to sell this pair on a break of the bottom of this previous week’s candle. We expect the 1.03 level to offer a bit of support, but if that gives way we could see parity in very short order. As for buying this pair, we need to see fresh new highs above the 1.06 level in order to be comfortable.