.9998 was the best AUDUSD has been able to accomplish since yesterday and it has since fallen back a bit in what looks like a descending triangle. I thought .9993 would cap so it's almost right where it should be.
If you give the triangle an Elliott Wave interpretation then it's going to break in the direction from which it came which is upward. Before that happened you'd see a move down to or in the direction of point E. That makes sense given the overall uptrend of Aussie. There's no definitive sign the uptrend is over yet although there are bearish possibilities. On the shorter-term charts, momentum is not robust. What one can say with some certainty is that the current price movement is sideways. Only a break above 1.0022 (better 1.0070) or below .9850 and better .9804 will provide some direction.
On the plus side, there's a possible double bottom in January (9804 and 9833 with the confirmation point at 1.0077) and a target of 1.0350. Or, if one is bearish, the whole mess at the top is some sort of topping pattern but the confirmation won't be until .9537 is broken. As long as it stays below 1.0077 and better 1.0022, that's a reasonable outlook and those must be stops for any shorts at this point.
Support is at .9850, .9804, .9691, .9612 and .9544/32/15. If the pair gets above 1.0077, resistance is 1.0183, 1.0257, and 1.0300/50.
Here's a 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.