The AUDUSD pair fell during the day on Wednesday, but bounced off of the lows again, and therefore ended up forming a hammer.

The hammer of course is a bullish sign, and as a result we could get a bit of a bounce from here.

Nonetheless, we recognize that we are in a very negative market, and therefore we don’t really like the idea of buying anyway.

A break down below the bottom of the hammer is very negative, and would have us selling rather rapidly. Regardless, we feel the Australian dollar has more room to the downside.

Editor’s Note: Equity investors/traders can use the Currency Shares Australian Dollar Trust (FXA, quote) ETF to take positions in the Aussie dollar without a FOREX account.  The ETF looks to track the price of the Aussie dollar (AUDUSD), minus ETF fee. The fund seeks to reflect the price of the Aussie dollar (AUDUSD) with the shares representing a cost-effective investment relative to investing in the FOREX market.

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