AUD/USD initially dipped for the Thursday session as the Aussie sold off on poor job numbers out of that country. However, as the session continued, the “risk on” trade kicked into gear, and the Aussie always gets bought when that happens. This produced a bounce and formed a hammer at this important area. The 1.04 level is one we have been watching as a potential breakout point, and we continue to do so. This hammer would be confirmed if we break higher, but if we break lower this would be a massively bearish sign. We are simply waiting to see which side of this hammer that the market closes on in the daily time frame, and trading with that direction.