AUDUSD—waffling

It's tempting to go bearish on this pair but the reality is that right now it's waffling. A look at the daily shows it is staying above the downtrend line that is coming in from November. As long as it stays above .9215 this will be true. However, while it may be hanging around trying to build strength for another run at .9406, resistance there is going to be fierce. Trying a long position here is a bit risky. The risk is less if it clears .9300. Unfortunately, a case can be made in the short term for shorting rallies as well. It's probably best to stand aside until there's a clearer picture.

Support is at .9249, .9229, .9202 (strong), .9166 and .9131. Resistance is at .9300, .9389, .9406 and .9427. If it somehow clears that then look out. It may eventually achieve its 2008 high of .9851. But clearing .9406 will be tough.

Here's the daily 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.