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The Australian dollar continues its recovery journey. After crashing to a near-three-year low, it bounces back quite impressively, and it is already 200 pips above the bottom.

The A$ closed the gap created at the wake of the week, after China’s poor figures and is trading well above the 0.9495 level it closed on Friday. A hammer pattern is emerging.

One of the reasons for this extended rise is the release of the Australian  Westpac Consumer Sentiment, which exceeded expectations and rose by 4.7%. But the bigger picture is the dollar’s weakness. The USD is retreating also against other currencies.

On the weekly chart, we can see a hammer pattern forming: a deep dive to new lows only for the pair to rise back higher and to turn the candle to green, after 5 weeks of falls. Is the pair turning around? We need to wait for the end of the week.

AUD USD Hammer Pattern - Click image to enlarge
AUD USD Hammer Pattern – Click image to enlarge

The peak so far is 0.9542. 0.9580 is the clear line of resistance: this was the bottom that the pair reached in June 2012. Weak support appears at 0.9527, followed by 0.9480.

The next big event for the Aussie is the release of employment figures. See how to trade the Australian employment figures with AUD/USD.

For more levels and analysis, see the AUDUSD weekly forecast.