AUDUSD—weak

AUDUSD is weak this morning going into my trading day but currently the pair isn't much lower than it was on Friday when I took partial profits. My short position at .9240 is still on with a profit stop in place.

Its low so far has been .9106 and its stalling which makes sense given the support levels that are in place. I'd expect tough support down to .9054. A break below that would be fairly clear until .9001 where the pair would again run into strong support. The market appears somewhat risk averse this morning so further drops might happen. Continuing to short on rallies seems to be the way to go but a confident close above .9180 would, of course, change things to a less bearish outlook.

This pair is still in an overall uptrend from late 2008 lows. That won't change until it breaks .7164 but there's a lot of ground between here and there and profits are possible.

Support is at .9106, .9096, .9076, .9054, .9001, .8888,.8760, and .8451. Resistance is at .9137, 9156/70, .9230, .9252, .9330, and .9406.

Here's the hourly 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.