AUDUSD—6 solid weeks

I'm still long from .8913. The pair completed the sixth week of higher highs and five consecutive weeks of higher lows. Sounds like an uptrend, right, at least in the intermediate sense? On the weekly chart below, the cause for concern is RSI. There's negative divergence with this uptrend in price. The price has been stuck in a range between .9625 and .9750 since Sept. 29th. This is either consolidation prior to the long-awaited push back to the 2008 .9851 high or it's something that price will eventually break below. If it does do this then the pair should find good support at .9330. Below that is .9213 and .9126. A drop below that would be alarming to bulls.

Here's the weekly chart. My trades don't show on these longer-term charts because I use a different charting package.










© 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.