Dropping down quite a bit from the weekly chart, Aussie is in a triangle on the three-hour chart as well, entering it from the low of .9538 last year. If this is a standard, five-touch triangle, there will be one more small push to the upside ending around 1.0190 which would be point E. After that price would fall, eventually puncturing the triangle's lower boundary around .9975. The three-hour chart also has negative diversion of price and RSI.
At this point, it's probably best to stand aside until this is resolved. My inclination is to go long but I'm going to wait a bit and see how this all plays out. If it resolves to the upside there will still be time to get in and make pips as it works its way up within an upward-sloping rectangle on the daily chart (not shown).
Here's the three-hour 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.