Aussie rose throughout the Asian and early morning European session, reaching a high of 1.0085 as of 9:03 AM EST. This is almost exactly the .618 retracement of the drop from 1.0257 to .9804 and a few pips above the confirmation point for the double bottom in January (.9804 on 1/11 and .9833 on 1/20). So, technically, the double bottom has been confirmed but let's see if the pair can close above it for the day. If so, then the price target is 1.0350. The last closed candle on the hourly chart was a doji so I'd expect some retracement here.
I wrote yesterday about the diamond pattern. The price target for the diamond was 1.0082. Normally one would expect a bit better than only the minimum price target but the reality is that this is heavy resistance. If it successfully scales 1.0083, the next resistance is at 1.0183 and 1.0257, the December high.
As to all the mutterings about double tops (1.0183 and 1.0257)—there is no double top until it's confirmed with a break below .9538. At this moment, good luck with that. Before it gets there it will find support at .9988,.9916, .9867, .9804, .9740, and .9691. However, I'm not completely bullish on the pair although I'm still long from .9952. It's troubling when a pair breaks a trendline and throws off bearish candles on the weekly chart. But as I've written before, this pair is like a rubber doll you punch down and then it comes right back at you.
© 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.
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