Thursday, May 27, 2010

AUDUSD—fighting resistance

AUDUSD has continued to trend upward to a high of .8418 this morning but has been fighting resistance here. I'm still long from 8093. I took some partial profits at +296 pips. A clear break upwards of .8418 would cause me to add to my position. I have price targets for the pair that indicate it could reach .8640 but it will have to fight to get there. There's still risk aversion out there.

The high so far today has been .8317. This is near resistance of .8366 so there should be some sellers coming in. Note, too, that in addition to the price resistance there is a short-term downtrend line coming in from earlier this month.

Resistance is at .8418, .8499, .8560, .8578, .8610 and .8700. Support is at .8310, .8285, .8163, .8067, .8000, .7932 and .7830.

I'll continue to watch momentum on this pair from the point of view of it breaking its uptrend lines under price and RSI. In addition, it RSI becomes overbought on the hourly chart and then drops from overbought (over 70), along with faltering price action, it will probably be time to at least lighten a long position and possibly to close it and go short.

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.

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