AUDUSD seems to have based at .8316/17 (two touches since 30 June) but it won't be confirmed as a double bottom until it exceeds the high between the two which is at .8510. It's high so far this morning has been .8498.
Since the pair is at resistance I took a small short position earlier this morning at .8478. This allowed me to have a tight stop, the number one thing a trader can do to limit losses. Momentum, as represented by RSI, looks somewhat sluggish, never a good sign. However, until the pair falls below .8432 (the short-term uptrend line) there's no reason to get very excited.
It's possible the pair is setting up a range from .8316 to .8510 in a flat correction. If the pair clears the top at .8510, it's possible AUDUSD is resuming its upward path and may get on track to achieve the price target of .9030 estimated from its double bottom in late May/early June.
Resistance is at .8510, .8565, .8645, .8737, .8861, and .8895. Support is at .8432, .8316, .8133, and .8067.
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.