AUDUSD—weekly chart

On the weekly chart, one can make a case that the pair is starting down. An Elliott wave count (EW) supports this as does the three tops (.8881, .8861, and .8873). This won't be a triple top until price breaks below .8066. If you try to look at it as a double top (.8861 and .8873) it won't be confirmed until .8316. The short term upward trend line on the weekly rectangle is at .8460. So, .8460, .8316 and .8066 are all interesting support levels. Resistance is obvious at .8861/81. A clear break above there would mean a long since the pair has never fulfilled its .9040 price objective from the confirmed double bottom.

I've gone short at .8680. Nearby resistance is .8719 so the stop can be tight. My trade doesn't show on the weekly chart because I use a different charting package for longer term charts.

Here's the weekly 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.