Monday, January 31, 2011

AUDUSD—weekly chart

Aussie is throwing off some conflicting signals and I have price targets in both directions from both the longer and shorter-term charts. However, the longer-term uptrend has not been definitively reversed despite a break of the shorter-term trendline from June 2010 and some bearish candles.

Price has been hanging around just below the red broken uptrend line and since that line is resistance, I consider this bullish—there's just not enough selling coming in to overwhelm the bulls and push price down even after the bearish break. I'm wondering if the short-term "fundamental" news—flooding and potential cyclones—isn't driving this downward move. Note the wedge (the red lower line and the blue upper line both pointing upwards to a meeting point in the next couple of weeks). Rising wedges tend to break downward because the steepest angle is the least sustainable. Prices have dipped below the wedge but usually once they break below they fall rather quickly. This hasn't happened.

Weekly support is at .9797 (weekly 20 EMA), .9537 (December low),.8770, .8067 and .7920 (weekly uptrend line from 2008). Weekly resistance is at 1.0086 (broken uptrend line), 1.0183 and 1.0257)

Here's the weekly chart:

© Dianne Fecteau, 2011. 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.

No comments:

Post a Comment