End of day look at AUDUSD - 15 min chart

AUDUSD slowly inched its way above the channel’s upper trend line this afternoon. Yet, all doesn’t look assured for its unfettered climb to yet higher highs. It looks as though it has formed a doji evening star on the 15-minute chart.

A doji evening star pattern occurs after an uptrend and consists of three candles:

1) The first is a long bullish candle
2) The second is a doji, a candle where the open and close are the same
3) The third candle is a bearish one that closes well into the body of the first candle

The pattern has more significance if it occurs near resistance or at a psychologically significant number. At .9294 highs, it’s close to the round number of .9300. Also troubling is the dip below the short term trend line both in price and RSI. It’s also at the top of that channel. None of this is reason to head for the hills and abandon longs; nor is it reason to sell, baby, sell. One can lighten a long position as I just did. Mostly, though, it’s a hint to watch and observe. Remember, this pair is in an uptrend. The bulls are not going to give up without a fight. It’s a commodity currency and we all know that commodities seem to be going up, not down.

But…if commodity prices slow this pair could take it as a chance to catch its breath and prepare for another push upwards. I noted recently that I have a price projections into the mid-90s but I also noted last week that it wouldn’t surprise me to see a pullback to .8800. As usual, we’ll have to see. Here’s the 15-minute chart:

© Dianne Fecteau, 2009. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.