The AUDUSD hasn't been doing much, either in price or momentum (as measured by RSI). However, price has reached a high of .8853 which puts it very close to .8860. That's the top of the range on the weekly chart and is the June 21 high and polarity. In addition, .8878 is the location of the 100 SMA on the daily chart. Finally, .8868 is .618 of the .9364 to .8067 move. One can see why it's locked in a battle here with neither bulls nor bears coming out ahead. Should it make it above here (and it's looking doubtful) then .9040, the target from the confirmed double bottom is possible.
I'm probably going to close my long from .8593 given all the negative pressure. Certainly a drop below the uptrend line at .8769 and the recent low of .8663 would make the bears more powerful and target .8400. We just need to wait and see with this pair. A reverse to a short may be in the cards.
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.
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