AUDUSD—fake break?

AUDUSD dropped to a low of .9066 today—this was a break of the uptrend line begin Feb. 5 at .8578—but the pair immediately bounced back above it which leads one to suspect the break was a fake and the pair may not go much lower. What's new? This pair just won't give up its uptrend even though it's looking weaker during this correction (if that's what it is). There's bullish divergence (which may be working itself out) on the three-hour chart.

However, if it continues to climb, it will bump its head on the top of its slightly expanding upward channel at .9249 which is also prior resistance. Frankly, I'd be stunned if it got there but, hey, who really knows about these things? All you can do is watch the charts.

I'm still short from .9185 which is profit-stopped.

Support is at .9066/63, .8979/90 (strong), .8914 (strong), .8801, .8784 (strong) and .8578. Resistance is at .9112, .9140, .9249, .9330, and .9406.

Here's the three-hour chart:













© Dianne Fecteau, 2010. 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.