Thursday, September 16, 2010

AUDUSD—.9457 still caps

I'm still long from .8913. The pair is stalling but it certainly hasn't had much of a retracement with the low since Tuesday's high only .9331. A .382 retracement of the move up from .8770 would be just below .9200 which would be a psychological level and near a prior high of .9176.

On the three-hour chart the pair is trying to break out of a pennant formation. There's a tremendous amount of bullish sentiment out there which is either good or bad depending on how you look at it. I saw one statistic this morning that said overall bullishness for AUDUSD is at 93%. That's very high given that it has already had a good move up. But that's sentiment for you and it is easier for a pair to keep going up if it has already been moving up.

It needs to break above the .9457 high and that's what everyone will be watching. If it does so in a clear and solid fashion, the 2008 high of .9851 is a possibility (but not without some retracement—nothing goes straight up). Look for faltering at .9500. Support is at .9331, .9200, .9185/76, .9092, .9067 and .8911.

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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