AUDUSD—good rally

The pair closed the week Friday below parity at .9959. Note that last week's low of .9706 confirmed the double top with a potential price target of .9401. However, the rally has been strong—the pair touched 1.0070 this morning, well above the .618 from the move down from 1.0158. I went long last week at .9940 with a price target of 1.0053. Obviously, I took some profits at that point. Before reversing and going short, however, I need to see multiple bearish signals on the shorter-term charts.

On the hourly chart, the pair looks as though it's completing a third wave up so expect a reaction, possibly only to 1.0054 or .9987. Below that is support at .9959, then .9872 and .9781.

Here's the hourly 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.