Where is it going to go from here? As I wrote yesterday, I have price targets at various levels up to 1.14. In the minutes released yesterday by the Reserve Bank of Australia, there is comment that since Japan is a major export market for Australia and since there is going to be massive rebuilding and reconstruction in Japan, Australia's exports to Japan may increase. What is interesting is that exporters usually find a strong currency to be a challenge. The Australian dollar is very strong indeed.
Since 1.0650 was a major target, one would expect sellers to take some profits. This should depress prices a bit—let's see if it happens or if buyers are on a tear. It is difficult to believe price can keep rising like this. Where are the buyers who have not already bought in? On the most recent Commitment of Traders report, there were 97,153 long noncommercial traders and only 6,502 short ones. These are extremes. Such extremes do not occur frequently.
First level of support should now be at 1.0583. Additional support is at 1.0444, 1.0390, 1.0289, 1.0248 and 1.0205.
Below is the three-hour chart I prepared yesterday where I entered because there was a hammer at the low of 1.0444 and it was near a price projection I had made for an ABC correction.
© 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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